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UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
SCHEDULE14A
ProxyStatementPursuanttoSection14(a)oftheSecuritiesExchangeActof1934(AmendmentNo.)
FiledbytheRegistrantý
FiledbyaPartyotherthantheRegistranto
Checktheappropriatebox:
o PreliminaryProxyStatement
o Confidential,forUseoftheCommissionOnly(aspermittedbyRule14a-6(e)(2))
ý DefinitiveProxyStatement
o DefinitiveAdditionalMaterials
o SolicitingMaterialunder§240.14a-12
WPXEnergy,Inc.
(NameofRegistrantasSpecifiedInItsCharter)
(NameofPerson(s)FilingProxyStatement,ifotherthantheRegistrant)
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ý Nofeerequired.
o FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11. (1) Titleofeachclassofsecuritiestowhichtransactionapplies:
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(3) PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(setforththeamountonwhichthefiling
feeiscalculatedandstatehowitwasdetermined):
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3500OneWilliamsCenterTulsa,Oklahoma74172
April7,2020DearWPXEnergyStockholders:
Youarecordiallyinvitedtoattendthe2020AnnualMeetingofStockholdersofWPXEnergy,Inc.ThemeetingwillbeheldonThursday,May21,2020,intheRobertJ.LafortuneStudiooftheTulsaPerformingArtsCenter,110EastSecondStreet,Tulsa,Oklahoma74103,at9:30a.m.,CentralDaylightTime.WelookforwardtogreetingpersonallyasmanyofourstockholdersaspossibleattheAnnualMeeting.
ThenoticeoftheAnnualMeetingandproxystatementthataccompanythisletterprovideinformationconcerningmatterstobeconsideredandacteduponattheAnnualMeeting.Ourproxystatementalsoincludesinformationaboutthemeetingitself,including:
• howtoobtainadmissiontothemeetingifyouplantoattend;and
• differentmethodsyoucanusetovotebyproxy,includingbyInternet,telephoneandmail.
AsastockholderofWPXEnergy,youplayanimportantroleinourcompanybyconsideringandtakingactiononthesematters.Weappreciatethetimeandattentionyouinvestinmakingthoughtfuldecisions.
WhilemostofourstockholdersareunlikelytobeabletoattendtheAnnualMeetinginperson,itisimportantthatyoursharesberepresentedandvotedatthemeeting.Weencourageyoutovoteyoursharesaspromptlyaspossible.
Thankyouforyourcontinuedinterestinourcompany.
Verytrulyyours,
RichardE.MuncriefChairman of the Board of Directors and Chief Executive Officer
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WPXENERGY,INC.3500OneWilliamsCenterTulsa,Oklahoma74172
NOTICEOFANNUALMEETINGOFSTOCKHOLDERSMay21,2020
TothestockholdersofWPXEnergy,Inc.:
WPXEnergy,Inc.willholditsAnnualMeetingofStockholdersonMay21,2020at9:30a.m.CentralDaylightTimeintheRobertJ.LafortuneStudiooftheTulsaPerformingArtsCenter,110EastSecondStreet,Tulsa,Oklahoma74103*.DetailsfortheAnnualMeetingofStockholdersarebelow:
* AspartofourprecautionsregardingtheoutbreakofthecoronavirusorCOVID-19,weareplanningforthepossibilitythattheAnnualMeetingmaybeheldsolelybymeansofremotecommunication.Ifwetakethisstep,wewillannouncethedecisiontodosoinadvance,anddetailsonhowtoparticipatewillbeavailableatwww.wpxenergy.com.
IMPORTANTNOTICEREGARDINGAVAILABILITYOFPROXYMATERIALSFORTHEANNUALMEETINGOFSTOCKHOLDERS
TOBEHELDONMAY21,2020:
TheNoticeofInternetAvailabilityofProxyMaterials,NoticeofAnnualMeeting,ProxyStatementandAnnualReportareavailableat
www.edocumentview.com/WPX
TIME 9:30a.m.,CentralDaylightTime,onThursday,May21,2020PLACE RobertJ.LafortuneStudiooftheTulsaPerformingArtsCenter,110EastSecondStreet,Tulsa,Oklahoma74103*ITEMSOFBUSINESS 1. Toelecttendirectornomineesidentifiedinthisproxystatement,onthetermsandconditionsspecified; 2. Toconductanadvisoryvoteonexecutivecompensation; 3. ToratifytheappointmentofErnst&YoungLLPasourindependentauditorsfor2020;and 4. TotransactsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingoranyadjournmentofthemeeting.RECORDDATE YoucanvoteandattendtheAnnualMeetingifyouwereastockholderofrecordatthecloseofbusinessonMarch30,2020.ANNUALREPORT Our2019annualreport,whichincludesacopyofourAnnualReportonForm10-K,accompaniesthisproxystatement.PROXYVOTING ItisimportantthatyoursharesberepresentedandvotedattheAnnualMeeting.WeencourageyoutovotebyInternetortelephone,orcomplete,signandreturn
yourproxypriortothemeetingevenifyouplantoattendtheAnnualMeeting.Ifyoulaterchoosetorevokeyourproxy,youmaydosoatanytimebeforeitisexercisedattheAnnualMeetingbyfollowingtheproceduresdescribedunderQuestion12ofthe"QuestionsandAnswersabouttheAnnualMeetingandVoting"sectionintheattachedproxystatement.
ByOrderoftheBoardofDirectors,
StephenE.BrilzVice President and Corporate Secretary
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SUMMARY 1QUESTIONSANDANSWERSABOUTTHEANNUALMEETINGANDVOTING 5PROPOSAL1—ELECTIONOFDIRECTORS 11
Director Nomination Process 11Nominees 14
CORPORATEGOVERNANCE 19Overview 19Corporate Governance Practices 19BoardStructure 19BoardandBoardCommitteesCompositionandPerformance 19GuidelinesandBoardPolicies/Procedures 20IndependentAuditors 22CorporateGovernanceGuidelines 22CodeofBusinessConduct 22DirectorIndependence 22BoardLeadershipStructure 23RiskOversight 24
Executive Officers 25Board Meetings and Annual Meeting Attendance 26Board Committees 26AuditCommittee 27CompensationCommittee 27Nominating,Governance,EnvironmentalandPublicPolicyCommittee 27CommunicationswiththeBoardofDirectors 28
EXECUTIVECOMPENSATION 29Executive Summary 29Compensation Discussion and Analysis 30CompensationPhilosophy 31DeterminationofTotalCompensation 32
Role of the Committee and Board of Directors 32Consideration of 2019 Stockholder Advisory Vote to Approve 2018 Executive Compensation 32Role of the Committee's Independent Compensation Consultant 32Role of Management and Executive Officers 32Competitive Positioning 33Use of Tally Sheets and Wealth Accumulation Analysis 34
ElementsofourCompensationProgram 34Base Salary 34Annual Cash Incentive 35Long-Term Incentives 38Performance-Based Restricted Stock Units 39Vesting of 2017 Performance-Based RSUs 40Time-Based Restricted Stock Awards 41Benefits and Limited Perquisites 41
OtherCompensationPractices 42Stock Ownership Guidelines 42Consideration of Risk in Setting Executive Compensation 43Anti-Hedging and Anti-Pledging Policies 44Employment Agreements 44Termination and Severance Arrangements 44
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Change-in-Control 44Accounting and Tax Treatment 46
2020BusinessTransformationAward 472019SummaryCompensationTable 492019Performance-BasedRSUMaximumPotential 492019OutstandingEquityAwards 502019GrantsofPlan-BasedAwards 512019WPXOptionExercisesandStockVested 512019NonqualifiedDeferredCompensation 52Change-in-ControlAgreements 52TerminationScenarios 55CompensationCommitteeReport 55DirectorCompensation 56DirectorCompensationTable 57CEOPayRatio 58
Pay Ratio Methodology 58EQUITYCOMPENSATIONPLANINFORMATION 59PROPOSAL2—ADVISORYVOTEONEXECUTIVECOMPENSATION 60CERTAINRELATIONSHIPSANDTRANSACTIONS 62COMPENSATIONCOMMITTEEINTERLOCKSANDINSIDERPARTICIPATION 63AUDITCOMMITTEEREPORT 64INDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM 66PROPOSAL3—RATIFICATIONOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM 67SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT 68SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE 70OTHERMATTERSATMEETING 70
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SUMMARY
Thissummaryhighlightsinformationcontainedelsewhereinthisproxystatement.Weencourageyoutoreviewtheentireproxystatement.
WearetakingadvantageofrulesoftheSecuritiesandExchangeCommission,or"SEC,"thatallowustodeliverproxymaterialstoourstockholdersontheInternet.Undertheserules,wearesendingmostofourstockholdersabriefnoticeregardingtheInternetavailabilityofproxymaterialsinsteadofafullsetofproxymaterials.Ifyoureceivethisbriefnotice,or"Notice,"youwillnotreceiveprintedcopiesoftheproxymaterialsunlessyouspecificallyrequestthem.Instead,thisNoticetellsyouhowtoaccessandreviewontheInternetalloftheimportantinformationcontainedintheproxymaterials,includingourannualreporttostockholders.ThisNoticealsotellsyouhowtosubmityourproxycardontheInternetandhowtorequesttoreceiveaprintedcopyoftheproxymaterials.
Weexpecttomail,orprovidenoticeandelectronicdeliveryof,thisproxystatement,ourannualreportandaccompanyingproxycardtostockholdersbeginningonoraboutApril7,2020.Unlessthecontextotherwiserequires,theterms"WPXEnergy,""WPX,"the"Company,""us,""we,"and"our"includeWPXEnergy,Inc.anditsconsolidatedsubsidiaries.
WPXEnergy,Inc.
Weareanindependentoilandnaturalgasexplorationandproductioncompanyengagedintheexploitationanddevelopmentoflong-lifeunconventionalproperties.Our2019AnnualReport,whichaccompaniesthisproxystatement,providesacomprehensivedescriptionofourbusiness.
CorporateGovernance
WPXEnergyiscommittedtomeetinghighstandardsofethicalbehavior,corporategovernanceandbusinessconductineverythingwedo.Consistentwiththiscommitment,wehaveadoptedthefollowingpractices:
• Board Structure and Composition.Alldirectors,otherthanourChairmanandChiefExecutiveOfficerandourPresidentandChiefOperatingOfficer,areindependent.TheindependentdirectorshavedesignatedaLeadDirectorwhoischargedwiththeresponsibilitiessetforthintheLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com.
• Diversity Policy for Director Candidates.Whenselectingdirectorcandidates,ourBoardtakesdiversityintoaccountandseekstoensurearepresentationofvariedperspectivesandexperiences.Throughitssuccessionplanningprocess,theBoardreviewstheskillsandelementsofdiversity(includingsuchareasasgeography,race,gender,ethnicityandage)foralldirectorstoensurethatourBoardmembersrepresenttheappropriatemixofrelevantskills,perspectivesandexperiences.
• Stockholder Outreach and Engagement.TheCompanyregularlyengageswithstockholders,includingwithrespecttocorporategovernance,environmentalandcompensationmatters.ThishasledinrecentyearstoanumberofenhancementsintheCompany'sgovernance,compensationanddisclosurepractices,including:
• TheBoardactedtodeclassifytheBoard,sothatdirectorsareelectedannually.
• TheBoardhasenhanceditsdisclosureregardingtheskillsandqualificationsofeachdirectornominee,consistentwithrecentcorporategovernanceinitiatives.
• TheCompanyhaspublishedandpostedtoitswebsite(www.wpxenergy.com)anEnvironmental,SocialandGovernanceReport,or"ESGReport,"thatdescribesthe
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Company'seffortstobearesponsiblestewardoftheenvironmentandtotakeintoaccounttheinterestsofthecommunitieswhereweoperateandotherstakeholders.
• TheBoardhasactivelytakenstepstoimproveitsdiversity.
• Stock Ownership Guidelines.Ourdirectorsandexecutiveofficersaresubjecttostockownershipguidelinesthataligntheirinterestswiththoseofourstockholders,andalldirectorsandofficersareincompliancewiththeretentionrequirementsunderthoseguidelines.
• Recoupment Policy.WehavearecoupmentpolicythatrequirestheCompanytorecoverallperformance-basedincentivepaymentsfromseniorexecutives,includingallofournamedexecutiveofficers,foundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductresultinginasignificantrestatementoftheCompany'sfinancialstatements.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.See"Compensation Discussion and Analysis—Other Compensation Practices—Recoupment Policy"below.
• Independent Compensation Consultant.OurCompensationCommitteeusesanindependentcompensationconsultant,whichperformsnoconsultingorotherservicesfortheCompany.
• Environmental Policy.Wehaveanenvironmentalhealthandsafetypolicythatoutlinesourfocusonintegratingenvironmental,healthandsafetystewardshipintoourcorebusinessactivities.Consistentwiththispolicy,wetakereasonableandactivestepstodeployeffectiveflaringsolutionsandminimizemethaneemissionsfromouroperations.
• Transactions in Company Securities (Anti-Hedging Policy).Ourinsidertradingpolicyprohibitsshortsalesofsharesofourcommonstockbydirectorsandexecutiveofficers.Italsoprohibitstheuseofequivalentderivativesecuritiesthatwouldhavetheeffectofinsulatinginsidersfromanydownturninthevalueofourcommonstock.
• Anti-Pledging Policy.Ourinsidertradingpolicyprohibitsourdirectors,officers,andkeyemployeesfromholdingoursecuritiesinamarginaccountorusingsuchsecuritiesascollateralforaloan.
• ESG Oversight.InFebruary2019,theBoardamendedtheCharteroftheNominatingandGovernanceCommittee,redesignatingittheNominating,Governance,EnvironmentalandPublicPolicyCommittee.UnderitsrevisedCharter,thecommitteeprovidesfurtherassistancetotheBoardinitsoversightofenvironmental,safetyandpublicpolicymatters.
Enterprise-WideRiskOversight
OurBoardofDirectors,assistedbyitscommittees,overseesmanagement'senterprise-wideriskmanagementactivities.Riskmanagementactivitiesincludeassessingandtakingactionsnecessarytomanageriskincurredinconnectionwiththelong-termstrategicdirectionandoperationofourbusiness.
ExecutiveCompensation
OurCompensationCommitteestrivestoestablishandmaintainanexecutivecompensationprogramthatwillattract,engage,reward,andretainhighlyeffectiveexecutiveofficers,rewardsuperiorperformance,andprovideincentivestodriveresultsthatincreasestockholdervalue.Ourcompensationprogramincludesamixofbasesalary,anannualcashincentive,performance-basedrestrictedstockunits,equityawards,andbenefitsandlimitedperquisitestoachievethisresult.Weemphasizeperformance-basedrewardsandtheuseofequity,whichdirectlyalignsourexecutiveswith
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stockholders.Executivepayistiedtoperformancemetricsthatencompassbothshort-andlong-termgoalsandencourageprofitablegrowthwhilediscouragingexcessiverisk-taking.
Highlights of our Executive Compensation Program
• Pay for Performance—Asignificantportionofthecompensationopportunityforourexecutiveofficersvariesbaseduponachievementofannualorlong-termgoalslinkedtostockholdervalue
• Increase Stockholder Value—Weusebalancedperformancemetricstoencourageoperationalperformancewhilediscouragingexcessiverisk-taking
• Align Executive Officers with Stockholders—Executivecompensationopportunitiesareweightedtowardequityawardsthatalignourexecutiveofficerswiththelong-terminterestsofourstockholders
Informationregardingcompensationpaidtoeachofournamedexecutiveofficersin2019isdescribedinthe"CompensationDiscussionandAnalysis"below.
Summary of 2019 Compensation Decisions Made for Our CEO
• Base Salary—$950,000
• Annual Cash Incentive—$1,806,969,paidat159.8%oftarget
• Equity Awards—$7,500,000,grant-dayintendedvalueoftime-basedrestrictedstockaward("RSAs")andperformance-basedrestrictedstockunits("RSUs")
Strong Governance Standards in Oversight of Executive Compensation Policies
Wemaintainstronggovernancestandardsintheoversightofourexecutivecompensationpoliciesandpractices,including:
• anindependentCompensationCommitteethatengagesanindependentadvisor
• stockownershipguidelinestoencourageourexecutiveofficerstohaveasignificantstakeinourlong-termsuccess
• performance-basedcompensationusingbalancedperformancemetricsandperformance-basedequityawardscappedat100%oftargetifourtotalshareholderreturnisnegative
• double-triggerchange-in-controlagreementsandequityawards
• noexcisetaxgross-upsandlimitedperquisites
• aprohibitiononbackdatingstockoptionsandonrepricingwithoutstockholderapproval
• arecoupmentpolicythatrequiresrecoveryofallperformance-basedincentivepaymentsfromanyexecutiveofficersfoundbytheBoardofDirectorstobepersonallyresponsibleforfraudorintentionalmisconductthatcausestheneedforasignificantfinancialrestatementandrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults
• aprohibitionon:
• shortsalesofourcommonstock
• theuseofequivalentderivativesecuritiesthatwouldhavetheeffectofinsulatinginsidersfromanydownturninthevalueofourcommonstock
• margintradinginourstockbydirectorsandexecutiveofficers
• pledgingofourstockbydirectorsandexecutiveofficers
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Proposals
Proposal1—ElectionofDirectors(seepages11-19)
TheBoardhasnominatedtencandidatesforelectiontoourBoardofDirectors.TheBoardrecommendsthatstockholdersvoteFORtheelectionofeachnominee.
Proposal2—AdvisoryVotetoApprovetheCompany'sExecutiveCompensation(seepages60-61)
TheBoardisseekinganadvisoryvotetoapprovetheCompany'sexecutivecompensation.Beforeconsideringthisproposal,pleasereadourCompensationDiscussionandAnalysis,whichexplainstheCompensationCommittee'scompensationdecisionsandhowourexecutivecompensationprogramalignstheinterestsofourexecutiveofficerswiththoseofourstockholders.AlthoughthevoteisadvisoryandisnotbindingontheBoard,theCompensationCommitteewilltakeintoaccounttheoutcomeofthevotewhenconsideringfutureexecutivecompensationdecisions.Forthereasonsdiscussedinthisproxystatement,theBoardrecommendsthatstockholdersvoteFORtheapprovaloftheCompany'sexecutivecompensation.
Proposal3—RatificationofIndependentRegisteredPublicAccountingFirm(seepage67)
TheAuditCommitteehasappointedErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2020.TheBoardisseekingstockholderratificationofthisappointment.TheBoardrecommendsthatstockholdersvoteFORratificationoftheselectionofErnst&YoungLLP.
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QUESTIONSANDANSWERSABOUTTHEANNUALMEETINGANDVOTING
1.WhatisthepurposeoftheAnnualMeeting?
AttheAnnualMeeting,stockholderswillactuponthemattersoutlinedintheNoticeofAnnualMeetingofStockholders.Theseincludetheelectionofdirectors,anadvisoryvotetoapproveourexecutivecompensationandtheratificationoftheappointmentofErnst&YoungLLPasourindependentregisteredpublicaccountingfirm.ManagementandrepresentativesofErnst&YoungLLPwillbeavailabletorespondtoquestionsfromstockholders.
2.Whatisaproxy?
Itisyourlegaldesignationofanotherpersontovotethestockyouowninthemanneryoudirect.Thatotherpersoniscalledaproxy.Ifyoudesignatesomeoneasyourproxyinawrittendocument,thatdocumentalsoiscalledaproxyoraproxycard.WehavedesignatedDennisC.CameronandStephenE.BrilztoserveasproxiesfortheAnnualMeeting.TheBoardofDirectorswillusetheproxiesatthe2020AnnualMeetingofStockholders.Theproxiesalsomaybevotedatanyadjournmentsorpostponementsofthemeeting.
3.Whatisaproxystatement?
ItisadocumentwegiveyouwhenwearesolicitingyourvotepursuanttoSECregulations.
4.Whatisthedifferencebetweenastockholderofrecordandastockholderwhoholdsstockinstreetname?
Stockholders of Record. Ifyoursharesareregisteredinyournamewithourtransferagent,Computershare,youareastockholderofrecordwithrespecttothosesharesandtheNoticeortheproxymaterialsweresentdirectlytoyoubyComputershare.
Street Name Holders. Ifyouholdyoursharesinanaccountatabankorbroker,thenyouarethebeneficialownerofsharesheldin"streetname."TheNoticeorproxymaterialswereforwardedtoyoubyyourbankorbroker,whoisconsideredthestockholderofrecordforpurposesofvotingattheAnnualMeeting.Asabeneficialowner,youhavetherighttodirectyourbankorbrokeronhowtovotethesharesheldinyouraccount.
5.HowmanysharesmustbepresenttoholdtheAnnualMeeting?
InordertoconducttheAnnualMeeting,holdersofamajorityofthesharesentitledtovoteasofthecloseofbusinessontherecorddatemustbepresentinpersonorbyproxy.Thisconstitutesaquorum.YoursharesarecountedaspresentifyouattendtheAnnualMeetingorifyoursharesarerepresentedbyproxy.Abstentionsandbrokernon-voteswillbecountedaspresentforpurposesofestablishingaquorum.Ifaquorumisnotpresent,wewilladjourntheAnnualMeetinguntilaquorumisobtained.
6.HowcanIaccesstheproxymaterialsfortheAnnualMeeting?
Stockholdersmayaccesstheproxymaterials,whichincludetheNoticeofInternetAvailabilityofProxyMaterials,theNoticeofAnnualMeetingofStockholders,ProxyStatementandAnnualReportfortheyearendedDecember31,2019ontheInternetatwww.edocumentview.com/WPX.WewillalsoprovideahardcopyofanyofthesedocumentsfreeofchargeuponrequestassetforthintheNoticeofInternetAvailabilityofProxyMaterialsorbywritingusat:WPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.
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Insteadofreceivingfuturecopiesofourproxymaterialsbymail,youcanelecttoreceiveane-mailthatwillprovideelectroniclinkstothesedocuments.Optingtoreceiveyourproxymaterialsonlinewillsavethecostofproducingandmailingdocumentstoyourhomeorbusiness,willgiveyouanelectroniclinktotheproxyvotingsiteandwillalsohelppreserveenvironmentalresources.
Stockholders of Record. IfyouvoteontheInternetatwww.envisionreports.com/WPX,simplyfollowthepromptsforenrollingintheelectronicproxydeliveryservice.Youalsomayenrollintheelectronicproxydeliveryserviceatanytimebygoingdirectlytowww.envisionreports.com/WPXandfollowingtheenrollmentinstructions.
Street Name Holders. Ifyouholdyoursharesinabankorbrokerageaccount,youmayalsohavetheopportunitytoreceivetheproxymaterialselectronically.Pleasechecktheinformationprovidedintheproxymaterialsyoureceivefromyourbankorbrokerregardingtheavailabilityofthisservice.
7.HowdoIattendtheAnnualMeeting?WhatdoIneedtobring?
AllstockholdersasoftheRecordDatemayattend.Pleasebringtothemeeting:
Proof of Ownership,suchasacopyofyourNoticeorproxycard,oracopyofabrokerageorbankstatementshowingyourshareownershipasoftheRecordDate;and
Proof of Identification,suchasavaliddriver'slicenseorpassport.
Ifyouholdyoursharesinstreetname,youwillnotbeabletovoteyoursharesattheAnnualMeetingwithoutalegalproxy,asdescribedinQuestion8.
Pleasenotethatuseofcameras,phonesorothersimilarelectronicdevicesandthebringingoflargebags,packagesorsoundorvideorecordingequipmentwillnotbepermittedinthemeetingroom.Attendeeswillalsoberequiredtocomplywithrulesoforderandprocedurethatwillbeavailableatthemeeting.
AspartofourprecautionsregardingtheoutbreakofthecoronavirusorCOVID-19,weareplanningforthepossibilitythattheAnnualMeetingmaybeheldsolelybymeansofremotecommunication.Ifwetakethisstep,wewillannouncethedecisiontodosoinadvance,anddetailsonhowtoparticipatewillbeavailableatwww.wpxenergy.com.
8.HowcanIvoteattheAnnualMeetingifIownsharesinstreetname?
Ifyouareastreetnameholder,youmaynotvoteyoursharesattheAnnualMeetingunlessyouobtainalegalproxyfromyourbankorbroker.Alegalproxyisabank'sorbroker'sauthorizationforyoutovotethesharesitholdsinitsnameonyourbehalf.Toobtainalegalproxy,pleasecontactyourbankorbrokerforfurtherinformation.
9.WhatsharesareincludedontheNotice,proxycardorvotinginstructionform?
Ifyouareastockholderofrecord,youwillreceiveonlyoneNoticeorproxycardforallthesharesofcommonstockyouhold:
• incertificateform;and
• inbook-entryform.
IfyouholdsharesinourEmployeeStockPurchasePlan,youwillreceiveaseparateNoticeorproxycardapplicabletothoseshares.
Ifyouholdyoursharesinstreetname,youwillreceiveoneNoticeorvotinginstructionformforeachaccountyouhavewithabankorbroker.Ifyouholdsharesinmultipleaccounts,youmayneedtoprovidevotinginstructionsforeachaccount.
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10.WhatdifferentmethodscanIusetovote?
ByWrittenProxy.Allstockholdersofrecordwhoreceivedproxymaterialsbymailcanvotebywrittenproxycard.IfyoureceivedaNoticeortheproxymaterialselectronically,youmayrequestaproxycardatanytimebyfollowingtheinstructionsontheNoticeoronthevotingwebsite.Ifyouareastreetnameholder,youwillreceiveinstructionsonhowyoumayvotefromyourbankorbroker,unlessyoupreviouslyenrolledinelectronicdelivery.
ByTelephoneorInternet.AllstockholdersofrecordcanvotebytelephonefromtheU.S.andCanada,usingthetoll-freetelephonenumberontheproxycard,orthroughtheInternetusingtheproceduresandinstructionsdescribedontheNoticeorproxycard.StreetnameholdersmayvotebyInternetortelephoneiftheirbankorbrokermakesthosemethodsavailable,inwhichcasethebankorbrokerwillenclosetheinstructionswiththeproxymaterials.TheInternetandtelephonevotingproceduresaredesignedtoauthenticatestockholders'identities,allowstockholderstovotetheirsharesandtoconfirmthattheirinstructionshavebeenproperlyrecorded.
InPerson.AllstockholdersofrecordmayvoteinpersonattheAnnualMeeting.StreetnameholdersmayvoteinpersonattheAnnualMeetingiftheyhavealegalproxy,asdescribedinQuestion8.
TheNoticeisnotaproxycardanditcannotbeusedtovoteyourshares.
11.Whatistherecorddateandwhatdoesitmean?
TherecorddatefortheAnnualMeetingisMarch30,2020.OnlyownersofrecordofsharesofcommonstockoftheCompanyatthecloseofbusinessontherecorddateareentitledtonoticeofandtovoteattheAnnualMeeting,oratanyadjournmentsorpostponementsoftheAnnualMeeting.OnMarch30,2020,therewere559,364,806sharesofcommonstockissued,outstandingandentitledtovote.Eachownerofrecordontherecorddateisentitledtoonevoteforeachshareofcommonstockheld.
TherecorddatewasestablishedbyourBoardofDirectorsasrequiredbytheGeneralCorporationLawoftheStateofDelaware.Ownersofrecordofcommonstockatthecloseofbusinessontherecorddateareentitledto:
• receivenoticeoftheAnnualMeeting;and
• voteattheAnnualMeetingandanyadjournmentsorpostponementsoftheAnnualMeeting.
12.IfIsubmitaproxy,mayIlaterrevokeitand/orchangemyvote?
Stockholdersmayrevokeaproxyand/orchangetheirvotepriortothecompletionofvotingattheAnnualMeetingby:
• signinganotherproxycardorvotinginstructionformwithalaterdateanddeliveringittotheCorporateSecretarybeforetheAnnualMeeting;
• votingagainovertheInternetorbytelephonepriorto11:59p.m.,EasternTime,onMay20,2020(or,ifyouareastreetnameholder,suchearliertimeasyourbankorbrokermaydirect);
• votingattheAnnualMeetingifyouareastockholderofrecordorareastreetnameholderthathasobtainedalegalproxyfromyourbankorbroker;or
• notifyingtheCorporateSecretaryoftheCompanyinwritingbeforetheAnnualMeeting.
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13.Arevotesconfidential?Whocountsthevotes?
Weholdthevotesofallstockholdersinconfidencefromdirectors,officersandemployeesexcept:
• asnecessarytomeetapplicablelegalrequirementsandtoassertordefendclaimsorpotentialclaimsfororagainsttheCompany;
• incaseofacontestedorpotentiallycontestedproxysolicitation;
• ifastockholdermakesawrittencommentontheproxycardorotherwisecommunicateshisorhervotetomanagement;or
• toallowtheindependentinspectorsoftheelectiontocertifytheresultsofthevote.
WehaveretainedComputersharetotabulatethevotesandactasindependentinspectoroftheelection.
14.Whataremychoiceswhenvotingfordirectornomineesandwhatvoteisneededtoelectdirectors?
Inthevoteontheelectionofdirectornominees,stockholdersmay:
• voteinfavorofanominee;
• voteagainstanominee;or
• abstainfromvotingwithrespecttoanominee.
DirectorswillbeelectedattheAnnualMeetinguponreceiptofmorevotescast"for"than"against"hisorherelection;abstentionswillnotcountasvotescastwithrespecttoadirector'selection.OurCorporateGovernanceGuidelinesrequiresalldirectorstotender,promptlyaftertheirelection,irrevocableresignationsfromtheBoardofDirectorsthatwillbeeffectiveifthedirectordoesnotreceiveagreaternumberofvotes"for"than"against"hisorherelectioninanuncontestedelection.Underthispolicy,theBoardofDirectorswilldeterminewhethertoacceptorrejecttheoffertoresignandpubliclydiscloseitsdecisionwithin90daysfromthedateofthecertificationoftheelectionresults.ThetextofthispolicyappearsinourCorporateGovernanceGuidelines,whichareavailableonourwebsiteatwww.wpxenergy.com.
TheBoardofDirectorsrecommendsavoteFOReachofthenominees.
15.WhataremychoiceswhenvotingoneachoftheotherproposalsconsideredattheAnnualMeeting?
Foreachoftheotherproposalsstockholdersmay:
• votefortheproposal;
• voteagainsttheproposal;or
• abstainfromvotingontheproposal.
16.WhatistheBoard'srecommendationwithregardtoeachproposal?
TheBoardofDirectorsmakesthefollowingrecommendationwithregardtoeachproposal:
• TheBoardofDirectorsrecommendsavoteFOReachofthedirectornominees.
• TheBoardofDirectorsrecommendsavoteFORadvisoryapprovaloftheCompany'sexecutivecompensation.
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• TheBoardofDirectorsrecommendsavoteFORratificationoftheappointmentofErnst&YoungLLPasourindependentregisteredpublicaccountingfirm.
17.Whatvoteisneededtoapproveeachproposal?
PleaseseeQuestion14regardingthevotethatisneededfortheelectionofdirectors.
EachoftheremainingproposalsmustbeapprovedbytheholdersofamajorityofthesharespresentandentitledtovoteinpersonorbyproxyattheAnnualMeetinginordertopass.TheBoardofDirectorswillconsidertheresultoftheadvisoryvotetoapproveourexecutivecompensationwhenconsideringfutureexecutivecompensationdecisions.
18.WhatifIdonotspecifyachoiceforamatterwhenreturningaproxy?
StockholdersshouldspecifytheirchoiceforeachmatterinthemannerdescribedintheNoticeorontheirproxycard.Ifnospecificinstructionsaregiven,proxiesthataresignedandreturnedwillbevoted:
• FORtheelectionofalldirectornominees;
• FORtheadvisoryapprovalofourexecutivecompensation;
• FORtheratificationoftheappointmentofErnst&YoungLLPastheCompany'sindependentregisteredpublicaccountingfirm.
19.AremysharesvotedifIdonotprovideaproxy?
Ifyouareastockholderofrecordanddonotprovideaproxy,youmustattendtheAnnualMeetinginordertovote.Ifyouholdsharesthroughanaccountwithabankorbroker,yoursharesmaybevotedbythebankorbrokeronsomemattersifyoudonotprovidevotinginstructions.BanksandbrokershavetheauthorityunderNewYorkStockExchange("NYSE")rulestovotesharesforwhichtheircustomersdonotprovidevotinginstructionsonroutinematters.TheratificationofErnst&YoungLLPasourindependentregisteredpublicaccountingfirmisconsideredaroutinematter.Theelectionofdirectorsandthevotesontheothermattersdescribedinthisproxystatementarenotconsideredroutineandbanksandbrokerscannotvoteshareswithoutinstructiononthosematters.Sharesthatbanksandbrokersarenotauthorizedtovotearecountedas"brokernon-votes."
20.Howareabstentionsandbrokernon-votescounted?
Abstentionshavenoeffectontheelectionofdirectors,asonly"for"and"against"votesarecounted.Abstentionshavetheeffectofan"AGAINST"voteontheproposalseekingadvisoryapprovalofourexecutivecompensationandtheratificationoftheappointmentoftheCompany'sindependentregisteredpublicaccountingfirm.Brokernon-voteswillbetreatedasnotpresentandnotentitledtovote.
21.DoestheCompanyhaveapolicyaboutdirectors'attendanceattheAnnualMeetingofStockholders?
TheCompanyexpectsdirectorstoattendtheAnnualMeeting,absentacompellingreason.
22.Whatarethedeadlinesforsubmittingstockholderproposalsforthe2021AnnualMeeting?
Stockholder Proposals to Be Considered for Inclusion in the Company's Proxy Materials. Tobeconsideredforinclusioninourproxystatementforour2021AnnualMeeting,stockholderproposalssubmittedinaccordancewiththeSEC'sRule14a-8mustbereceivednotlaterthanDecember8,2020andbesubmittedinaccordancewiththeSEC'sRule14a-8.Stockholderproposalsreceivedafterthe
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closeofbusinessonDecember8,2020wouldbeuntimely.ThesestockholderproposalsmustbeinwritingandreceivedbythedeadlinedescribedaboveatourprincipalexecutiveofficesatWPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.Ifwedonotreceiveastockholderproposalbythedeadlinedescribedabove,theproposalmaybeexcludedfromourproxystatementforour2021AnnualMeeting.
Other Stockholder Proposals for Presentation at the 2020 Annual Meeting. Astockholderproposalthatisnotsubmittedforinclusioninourproxystatementforour2021AnnualMeeting,butisinsteadsoughttobepresentedatthe2021AnnualMeeting,mustcomplywiththe"advancenotice"deadlinesinourBylaws.Assuch,thesestockholderproposalsmustbereceivednoearlierthanJanuary21,2021,andnolaterthanthecloseofbusinessonFebruary19,2021.Thesestockholderproposalsmustbeinwritingandreceivedwithinthe"advancenotice"deadlinesdescribedaboveatourprincipalexecutiveofficesatWPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.ThesestockholderproposalsmustbeintheformprovidedinourBylawsandmustincludetheinformationsetforthintheBylawsaboutthestockholderproposingthebusinessandanyassociatedperson,includinginformationaboutthedirectandindirectownershipoforderivativepositionsintheCompany'scommonstockandarrangementsandunderstandingsrelatedtotheproposedbusinessorthevotingoftheCompany'scommonstock.Ifwedonotreceiveastockholderproposalandtherequiredinformationregardingthestockholderandanyassociatedpersonbythe"advancenotice"deadlinesdescribedabove,theproposalmaybeexcludedfromtheproxystatementandfromconsiderationatthe2021AnnualMeeting.The"advancenotice"requirementdescribedabovesupersedesthenoticeperiodinSECRule14a-4(c)(1)ofthefederalproxyrulesregardingthediscretionaryproxyvotingauthoritywithrespecttosuchstockholderbusiness.
23.Howareproxiessolicitedandwhatisthecost?
Webearallexpensesincurredinconnectionwiththesolicitationofproxies.WehaveengagedGeorgesontoassistwiththesolicitationofproxiesforafeeof$4,000plusexpenses.Wewillreimbursebrokers,fiduciariesandcustodiansfortheircostsinforwardingproxymaterialstobeneficialownersofcommonstock.
Ourdirectors,officersandemployeesmayalsosolicitproxiesbymail,telephoneandpersonalcontact.Theywillnotreceiveanyadditionalcompensationfortheseactivities.
24.WherecanIfindmoreinformationaboutmyvotingrightsasastockholder?
TheSEChasaninformationalwebsitethatprovidesstockholderswithgeneralinformationabouthowtocasttheirvoteandwhyvotingshouldbeanimportantconsiderationforstockholders.Youmayaccessthatinformationatwww.sec.gov/spotlight/proxymatters.shtmloratwww.investor.gov.
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PROPOSAL1—ELECTIONOFDIRECTORS
DirectorNominationProcess
CriteriaforNominationtotheBoard
TheCharteroftheNominating,Governance,Environment&PublicPolicyCommittee,orthe"NGEPPCommittee,"whichisavailableonourwebsiteatwww.wpxenergy.comunder"Investors"and"CorporateGovernance,"providesthattheNGEPPCommitteemustdevelopandrecommendtotheBoardqualificationsforassessingdirectorcandidatesandidentifyandrecommendtotheBoardindividualsfornominationasBoardmembers.
OurCorporateGovernanceGuidelinessetforthcriteriaforindependentdirectornominees.TheNGEPPCommitteeevaluatespotentialBoardnomineesagainstthesecriteriaindeterminingwhethertorecommendanypotentialnomineeforconsiderationforelectionasamemberoftheBoard.Thesecriteriaincludethefollowing:
• Anunderstandingofbusinessandfinancialaffairsandthecomplexitiesofabusinessorganization.Althoughacareerinbusinessisnotessential,thenomineeshouldhaveaprovenrecordofcompetenceandaccomplishmentsthroughleadershipinindustry,education,theprofessionsorgovernment,andshouldbewillingtomaintainacommittedrelationshipwiththeCompanyasadirector.
• AgenuineinterestinrepresentingallofthestockholdersandtheinterestoftheCompanyoverall.
• Awillingnessandabilitytospendthenecessarytimetofunctioneffectivelyasadirector.
• Anopen-mindedapproachtomattersandtheresolvetoindependentlyanalyzematterspresentedforconsideration.
• Areputationforhonestyandintegritybeyondquestion.
• IndependenceasdefinedbytheNYSE,andqualificationsotherwiserequiredinaccordancewithapplicablelaworregulation.
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Thefollowingtablehighlightseachdirectornominee'sspecificskills,knowledgeandexperiences.Aparticulardirectormaypossessadditionalskills,knowledgeorexperienceeventhoughtheyarenotlistedbelow.Eachdirectorbiographybelowdescribestheskillsandexperiencesofdirectorsindetail.
TheNGEPPCommitteeroutinelyevaluatesthecompositionoftheBoardtoassesstheskillsandexperiencethatarecurrentlyrepresentedontheBoard,aswellastheskillsandexperiencetheBoardwillfindvaluableinthefuture,giventheCompany'scurrentsituationandstrategicplans.TheNGEPPCommitteeseeksavarietyofoccupationalandpersonalbackgroundsontheBoardinordertoobtainarangeofviewpointsandperspectivesandtoenhancethediversityoftheBoardinsuchareasasrace,gender,ethnicityandage.ThisassessmentenablestheBoardtoupdate,ifnecessary,theskillsandexperienceitseeksintheBoardasawhole,andinindividualdirectors,astheCompany'sneedsevolveandchangeovertime.
ProcessforIdentifyingandEvaluatingNominees
InconsideringpotentialcandidatestotheBoardwhoarenotincumbentdirectors,theNGEPPCommittee,withinputfromthefullBoardofDirectors,assessesthepotentialcandidate'squalifications,takingintoaccountthecriterialistedabove,andhowthesequalificationsfitwiththedesiredcompositionoftheBoardofDirectorsasawhole.
Inthecaseofincumbentdirectors,inadditiontothecriterialistedabove,theNGEPPCommitteereviewsthedirectors'overallperformanceontheBoardofDirectorsandotherrelevantfactors.
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JohnCarrig
ClayGaspar
RobertHerdman
KeltKindick
KarlKurtz
KimberlyLubel
RichardMuncrief
MartinPhillips
DouglasSwanson
ValarieWilliams
E&POperations ü ü ü ü OtherOil&GasOperations ü ü ü ü Health&Safety ü ü ü ü Engineering ü ü ü Geoscience ü ü ü Environmental ü ü ü ü Oil&GasRegulatory ü ü ü ü ü AuditingandFinancialReporting ü ü ü ü ü ü üCapitalMarketsandCorporateFinance ü ü ü ü ü ü üMarketing ü ü ü ü ü LegalExpertise ü ü FinancialAnalysisExpertise ü ü ü ü ü ü üInvestmentBanking/M&A ü ü ü ü ü CorporateGovernance ü ü ü ü ü ü ü ü ü üRiskManagement ü ü ü ü ü ü ü ü üHumanResourcesandCompensation ü ü ü ü ü ü ü üPublicPolicy ü ü ü ü ü ü StrategicPlanningandStrategyDevelopment ü ü ü ü ü ü ü ü ü üGovernmentExperience ü ü Digitaland/orInformationTechnologyOversight ü
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StockholderRecommendationsforNominees
TheNGEPPCommitteewillconsidernomineesrecommendedbyourstockholders.AnystockholderwishingtoproposeanomineeforconsiderationbytheNGEPPCommitteeshouldsubmitarecommendationinwritingtoourCorporateSecretaryatourprincipalexecutiveoffice,indicatingthenominee'squalificationsandotherrelevantbiographicalinformationandprovidingconfirmationofthenominee'sconsenttoserveasadirector.TheNGEPPCommitteedoesnotintendtoalteritscriteriaforevaluatingpotentialdirectorcandidates,includingthecriteriasetforthabove,inthecaseofdirectorcandidatesrecommendedbystockholders.TheNGEPPCommitteeperiodicallyconsidersrecommendationsfordirectorcandidates.
Ifyouwishtosubmitadirectornominationatafutureannualmeeting,youmustsupplytimelywrittennoticetotheCorporateSecretary.Forthe2021AnnualMeeting,thisnoticemustbereceivedatourprincipalexecutiveoffices,directedtotheCorporateSecretary,noearlierthanJanuary21,2021,andnolaterthanFebruary19,2021.ThenoticemustincludetheinformationsetforthintheBylawsabouteachproposednominee,including:(i)thename,age,businessaddress,residenceaddressandprincipaloccupationoremployment,businessexperienceduringthepastfiveyearsandanyotherdirectorshipsofpubliccompaniescurrentlyheldorheldduringthelastfiveyears,(ii)thenumberofsharesoftheCompany'scommonstockwhicharebeneficiallyowned,and(iii)otherinformationconcerningthenomineeaswouldberequiredinsolicitingproxiesfortheelectionofthatnominee.ThenoticemustalsoincludetheinformationsetforthintheBylawsaboutthestockholdermakingthenominationandanyassociatedperson,includinginformationaboutthedirectandindirectownershipoforderivativepositionsintheCompany'scommonstockandarrangementsandunderstandingsrelatedtotheproposednominationorthevotingoftheCompany'scommonstock.ThenoticemustalsoincludeasignedconsentofeachnomineetobenamedintheproxystatementasanomineeandtoserveasadirectoroftheCompanyifelected.Ifwedonotreceiveanoticeandtherequiredinformationregardingthenominee,thestockholderandanyassociatedpersonbythedeadlinedescribedabove,theproposednomineemaybeexcludedfromconsiderationbytheNGEPPCommittee.TheNGEPPCommitteewillonlyevaluatestockholder-recommendedcandidatesifthoserecommendationsmeettherequirementsdescribedinthisproxystatementandourBylaws.
2020DirectorNominees
ThefirstproposalforconsiderationattheAnnualMeetingistheelectionofeachofthetencandidatesnamedbelowasadirectorforaone-yeartermexpiringatour2021AnnualMeeting,oruntilhisorhersuccessorisdulyelectedandqualified,oruntilhisorherearlierretirement,resignation,disqualification,removalordeath.Messrs.HenryE.LentzandDavidF.Work,currentdirectors,willretirefromtheBoardattheAnnualMeeting.EffectiveimmediatelyfollowingtheclosingofthepollsfortheelectionofdirectorsattheAnnualMeeting,theBoardwillreduceitssizefromtwelvememberstotenmembers.IfanydirectornomineeshouldbecomeunavailableforelectionpriortotheAnnualMeeting,aneventthatcurrentlyisnotanticipatedbytheBoard,eithertheproxieswillbevotedinfavoroftheelectionofasubstitutenomineeornomineesproposedbytheBoardorthenumberofdirectorsmaybereducedaccordingly.Eachnomineehasagreedtoserveifelectedand,subjecttothemattersaddressedunder"StockholdersAgreement"below,theBoardhasnoreasontobelievethatanynomineewillbeunabletoserve.
StockholdersAgreement
AttheclosingofitsacquisitionofFelixEnergyHoldingsII,LLConMarch6,2020,theCompanyenteredintoaStockholdersAgreementwithFelixInvestmentHoldingsII,LLC("FelixHoldings")andcertainrelatedparties("Stockholders Agreement").SubjecttothetermsoftheStockholdersAgreement,FelixHoldingshastherighttodesignateuptotwodirectorstotheBoardwhoarereasonablyacceptabletotheNGEPPCommittee,untilsuchtimethatFelixHoldingsanditsrelatedpartieshold
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lessthan20%ofouroutstandingcommonstock.UntilsuchtimeasFelixHoldingsanditsrelatedpartiesholdlessthan10%ofouroutstandingcommonstock,FelixHoldingshastherighttodesignateonedirectortotheBoardwhoisreasonablyacceptabletotheNGEPPCommittee.IfatanytimethenumberofdirectorsservingontheBoardanddesignatedbyFelixHoldingsexceedsthenumberthatFelixHoldingsisentitledtodesignate,FelixHoldingsmustpromptlycauseoneormoreofitsdesignateddirectorstoresignfromtheBoardunlessotherwiserequestedbytheBoard.FelixHoldingshasdesignatedD.MartinPhillipsandDouglasE.Swanson,Jr.asitsdirectornomineespursuanttotheStockholdersAgreement.Messrs.PhillipsandSwansonhavebeenmembersoftheBoardsinceMarch6,2020.
ForsolongasFelixHoldingsanditsrelatedpartiesremainentitledtodesignatedirectorsundertheStockholdersAgreement,theyhaveagreedtocauseallsharesofcommonstockheldbythemtobevotedinfavorofdirectornomineesnominatedbytheNGEPPCommittee,againstanyotherdirectornominees,andagainsttheremovalofanydirector(otherthanadirectortheyhavedesignatedtotheBoard)unlesstheNGEPPCommitteerecommendsinfavorofsuchremoval.ForadditionalinformationregardingtheStockholdersAgreementandtheobligationsofthepartiesthereto,see"Certain Relationships and Transactions"andacopyoftheStockholdersAgreementincludedasanexhibittoourCurrentReportonForm8-KfiledwiththeSecuritiesandExchangeCommissiononMarch6,2020.
UpontherecommendationoftheNGEPPCommittee,theBoardhasnominatedeachofthedirectorsidentifiedbelowasanomineeforaone-yeartermexpiringatthe2021AnnualMeetingofStockholdersoruntilhisorhersuccessorisdulyelectedandqualified,oruntilhisorherearlierretirement,resignation,disqualification,removalordeath.
TheBoardofDirectorsrecommendsthatyouvoteFORtheelectionofeachofthenominees.ProxieswillbevotedFORtheelectionofeachnomineeunlessyouspecifyotherwise.
Thefollowingpresentsabriefbiographicaldescriptionofeachdirectornominee,aswellasadiscussionofthespecificexperience,qualificationandskillsofeachdirectorthathelpedleadtheBoardtoconcludethateachrespectivedirectorshouldcontinuetoserveasamemberoftheBoard.
Nominees
John A. Carrig. Mr.CarrighasbeenadirectorsinceDecember2011.Mr.CarrigistheformerPresidentandChiefOperatingOfficerofConocoPhillips(alargeintegratedoilcompanywithoperationsinmorethan30countries).HejoinedPhillipsPetroleuminLondonin1978asataxattorney.In1981,hetransferredtoBartlesville,Oklahoma,andwasassociatedwiththecorporatetaxstaffuntil1993whenhejoinedthetreasurygroupasfinancemanager.HewasthennamedAssistantTreasurerofFinance,andin1995heacceptedthepositionofTreasurer.HewasVicePresidentandTreasurerfrom1996to2000whenhewasnamedSeniorVicePresidentandTreasurer.Hewaselected
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Name Age DirectorSinceJohnA.Carrig 68 2011ClayM.Gaspar 48 2019RobertK.Herdman 71 2011KeltKindick 65 2013KarlF.Kurz 58 2014KimberlyS.Lubel 55 2011RichardE.Muncrief 61 2014D.MartinPhillips 66 2020DouglasE.Swanson,Jr. 48 2020ValerieM.Williams 63 2018
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SeniorVicePresidentandChiefFinancialOfficerforPhillipsin2001,apositionhehelduntiltheConocoPhillipsmergeroccurredin2002,atwhichtimehebecameExecutiveVicePresident,Finance,andChiefFinancialOfficerofConocoPhillips.In2008,hewasappointedPresidentandChiefOperatingOfficerofConocoPhillipsandbecameresponsibleforglobaloperations,includingexplorationandproduction,refiningandtransportation,projectdevelopmentandprocurement,andhealth,safetyandenvironmentalmatters.Mr.CarrigservedasPresidentofConocoPhillipsuntilhisretirementinMarch2011.Mr.CarriggraduatedPhiBetaKappawithaB.A.fromRutgersUniversityandreceivedhislawdegreefromTempleUniversity.HealsoholdsanadvancedegreeintaxlawfromNewYorkUniversitySchoolofLaw.Mr.CarrigservedasadirectorofTRCCompanies,Inc.(engineering,consultingandconstructionmanagementservicestotheenergy,environmentalandinfrastructuremarkets)from2012until2017andasadirectorofSkanskaAB(aglobalprojectdevelopmentandconstructioncompany)from2014until2018.HeiscurrentlyadirectorofForumEnergyTechnologies,Inc.(amanufacturerofoilandgasfieldmachineryandequipment).
WebelieveMr.CarrigiswellqualifiedtoserveasamemberofourBoard.Mr.Carrighasmanyyearsofexperienceinourindustry,includingoperating,financialandexecutiveexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.
Clay M. Gaspar. Mr.GasparhasservedasadirectoroftheCompanysinceNovember2019andasPresidentandChiefOperatingOfficersinceDecember2017.FromNovember2015untilDecember2017,heservedasSeniorVicePresidentandChiefOperatingOfficer,andfromOctober2014untilNovember2015,heservedasSeniorVicePresidentofOperationsandResourceDevelopment.FromJuly2012untilOctober2014,Mr.GasparservedasVicePresident—Mid-ContinentforNewfieldExplorationCompany.PriortojoiningNewfield,Mr.Gasparspent16yearswithAnadarkoPetroleumCorporationwhereheservedasGeneralManagerofInvestorRelationsfrom2011-2012,GeneralManager,BusinessAdvisorfrom2009-2011andGeneralManager,EastTexasfrom2007-2009.From1996-2007,Mr.GasparservedinvariousengineeringandmanagementpositionsatAnadarko.Mr.GasparstartedhiscareerwithMewbourneOilCompanyasaproductionanddrillingengineerwhereheworkedpart-timeasastudentfrom1991-1995andthenfull-timefrom1995-1996.HeisamemberoftheSocietyofPetroleumEngineersandholdsaBachelorofSciencedegreeinPetroleumEngineeringfromTexasA&MUniversityandaMasterofSciencedegreeinPetroleumandGeosciencesEngineeringfromtheUniversityofTexasatAustinandisaRegisteredProfessionalEngineerinthestateofTexas.Mr.GasparalsoservesontheboardsoftheTulsachapteroftheAmericanHeartAssociation,CatalystMidstreamPartners,LLC,andtheMichiganPotash&SaltCo.AtWPX,healsohasresponsibilityforoverseeingtheCompany'spro-activeESGendeavors,includingsupervisoryauthorityfortheCompany'sESGDirectorrole.
WebelievethatMr.GaspariswellqualifiedtoserveasamemberofourBoard.Mr.Gasparhasmanyyearsofexperienceintheupstreamenergybusiness,andwebelievethatthisexperiencewillbecriticaltohisabilitytoidentify,understandandaddressthechallengesandopportunitiesthatweface.AsPresidentandChiefOperatingOfficer,withintimateknowledgeofourbusinessandoperations,Mr.GasparbringsavaluableperspectivetotheBoard.WealsobelievethatMr.Gaspar'sexperiencewithmanagingtheoperationsofalarge,publiccompanyisadvantageoustous.
Robert K. Herdman. Mr.HerdmanhasbeenadirectorsinceDecember2011.Since2004,Mr.HerdmanhasbeenaManagingDirectorofKaloramaPartnersLLC(aWashington,D.C.consultingfirmspecializinginprovidingadviceregardingcorporategovernance,riskassessment,crisismanagementandrelatedmatters).PriortojoiningKalorama,Mr.HerdmanwastheChiefAccountantoftheSECfromOctober2001toNovember2002.PriortojoiningtheSEC,hewasErnst&Young'sViceChairmanofProfessionalPracticeforitsAssuranceandAdvisoryBusinessServices("AABS")practiceintheAmericasandtheGlobalDirectorofAABSProfessionalPracticeforErnst&YoungInternational.Mr.HerdmanwasalsotheseniorErnst&Youngpartnerresponsibleforthefirm's
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relationshipwiththeSEC,FinancialAccountingStandardsBoardandAmericanInstituteofCertifiedPublicAccountants("AICPA").Mr.HerdmanservedontheAICPA'sSECPracticeSectionExecutiveCommitteefrom1995to2001andasamemberoftheAICPA'sBoardofDirectorsfrom2000to2001.HeholdsaB.S.C.inaccountingfromDePaulUniversity.Mr.HerdmaniscurrentlyontheboardofdirectorsofCumminsInc.(adesignerandmanufacturerofdieselandpowerengines)andischairofitsauditcommittee.PriortoApril2015,heservedontheboardofdirectorsofHSBCFinanceCorporation(formerlyHouseholdInternational,Inc.),HSBCNorthAmericaHoldings,Inc.andHSBCUS,Inc.
WebelieveMr.HerdmaniswellqualifiedtoserveasamemberofourBoard.Mr.Herdmanhassignificantexperienceinfinanceandaccounting,aswellasexperiencerelatedtothecompensationofpubliccompanyexecutives.Webelievetheseexperiencesareimportanttohisabilitytounderstandandaddresschallengesandopportunitiesthatweface.Mr.Herdman'sSECandpublicaccountingexperienceprovidedhimwithinsightintothebusinessoperationsandfinancialperformanceofasignificantnumberofpubliccompanies,whichisadvantageoustousasapubliccompany.
Kelt Kindick. Mr.KindickhasbeenadirectorsinceJanuary2013andhasservedasourindependentLeadDirectorsinceMay2018.Mr.KindickservedaschieffinancialofficerandpartneratBain&Company,Inc.,amanagementconsultingfirm,fromJanuary2009untilhisretirementonDecember31,2012.HehasbeenservingasAdvisoryPartnerforBain&CompanysinceJanuary1,2013.HejoinedBain&Company,Inc.in1980,waselectedpartnerin1986,servedasManagingDirectorofthefirm'sBostonofficefrom1991to1996,andasChairmanofthefirm'sexecutivecommitteefrom1998to1999.Mr.KindickalsoservedaschieffinancialofficeroftheCommonwealthofMassachusettsfrom2003to2004.Mr.KindickservedasadirectorofTheAdvisoryBoardCompanyfrom2001to2017andwasleaddirectorfrom2004to2017.HereceivedaB.A.degreefromFranklin&MarshallCollegeandanM.B.A.fromHarvardBusinessSchool.
WebelievethatMr.KindickiswellqualifiedtoserveasamemberofourBoard.Hislongserviceataleadingmanagementconsultingfirm,wherehehasdevelopedextensiveexperienceinassessingandadvisingoncorporatestrategy,finance,operations,andtalentmanagement,aswellashisfinanceandaccountingexperience,willbeadvantageoustous.
Karl F. Kurz. Mr.KurzhasbeenadirectorsinceJanuary2014.FromSeptember2009untilhisretirementinSeptember2012,Mr.Kurzservedasamanagingdirector,co-headoftheenergygroupandamemberoftheinvestmentcommitteeatCCMPCapitalAdvisorsLLC,aleadingglobalprivateequityfirmwithafocusonenergyinvestments,amongotherareas.PriortojoiningCCMP,Mr.KurzspentnineyearswithAnadarkoPetroleumCorporation,mostrecentlyservingaschiefoperatingofficerresponsibleforoverseeingthecompany'sglobalexplorationandproduction,marketing,midstream,land,technologyandservicebusinesses.PriortojoiningAnadarko,Mr.KurzwasgeneralmanagerofmidstreamandmarketingforVastarResources,Inc.,wherehemanagedthecompany'smarketingofoil,naturalgasliquids,gasandgasprocessing.PriortojoiningVastarin1995,Mr.KurzheldmanagementpositionsatARCOOilandGasCompanyinseveralbusinessunitsincludingreservoirengineering,productionoperations,crudeoilmarketing,hedging,andfinancialtrading.Mr.KurzholdsaB.S.,magna cumlaude,inpetroleumengineeringfromTexasA&MUniversityandheisagraduateofHarvardBusinessSchool'sAdvancedManagementProgram.Mr.Kurzalsoservesasthenon-executiveChairmanofAmericanWaterWorksCompany,Inc.(waterandwastewaterservicescompany).HealsoservesasanadvisortoAresManagement,L.P.,acapitalinvestmentcompany.Mr.KurzservedasadirectorofWesternGasPartnersfromMay2008throughMarch2009,GlobalGeophysicalServices,Inc.(seismicdatasolutionsfortheoilandgasindustry)fromDecember2010throughDecember2014,andSemGroupCorporation(midstreamservicesprovidertoindependentoilandgasproducersandrefiners)from2009throughDecember,2019.
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WebelieveMr.KurziswellqualifiedtoserveasamemberofourBoard.Mr.Kurzhasmanyyearsofexperienceinourindustry,includingexecutive,investmentandoperatingexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Kurzalsohasextensivepublicpolicyexperiencefromservingoncommitteesandboardsofindustryorganizations.
Kimberly S. Lubel. Ms.LubelhasbeenadirectorsinceDecember2011.SheservedasChairmanoftheBoard,PresidentandChiefExecutiveOfficerofCSTBrands,Inc.(apublicly-tradedretaileroftransportationfuelsandconveniencegoods)fromMay2013untilitsacquisitionbyAlimentationCouche-TardInc.inJune2017.Ms.LubelalsoservedastheChairmanoftheBoardofthegeneralpartnerofCrossAmericaPartnersL.P.(apublicly-tradedmasterlimitedpartnership)fromOctober2014,whenCSTBrandsacquiredthegeneralpartner,untilJune2017.InJanuary2013Ms.LubelbecameresponsiblefortheretailorganizationofValeroEnergyCorporation(alargeindependentrefineroftransportationfuelsandrelatedproducts)intheUnitedStatesandCanadaasExecutiveVicePresidentandPresidentRetail,andservedinthatcapacityuntilthespin-offoftheretailorganizationasCSTBrands,Inc.Ms.LubelpreviouslyservedfromOctober2008toDecember31,2012,asExecutiveVicePresidentandGeneralCounselforValerowithresponsibilityoverValero'slegal,advaloremtax,health,safetyandenvironmental,energyandgases,reliability,andprojectexecutiondepartments.ShejoinedValeroin1997asCorporateCounsel.FromApril2006toOctober2008,sheservedasSeniorVicePresident&GeneralCounsel.SheservedasleadattorneyformostofValero'smajoracquisitionsduringhertenurewithValero.Ms.LubelholdsaB.A.inSpanishandinternationalstudiesfromMiamiUniversity(Ohio),anM.A.ininternationalrelationsfromBaylorUniversity,andaJ.D.fromtheUniversityofTexasSchoolofLaw.SheisalsoagraduateoftheExecutiveProgramatStanfordUniversity.Ms.LubelisamemberoftheboardofdirectorsofPBFEnergyInc.(apetroleumrefiningcompany)andalsoservesontheboardsofdirectorsoftheUnitedWayofTexas,theUnitedWayofSanAntonioandBexarCountyandtheSouthwestResearchInstitute,anon-profitresearchanddevelopmentorganizationbasedinSanAntonio.
WebelievethatMs.LubeliswellqualifiedtoserveasamemberofourBoard.Herchiefexecutiveofficerexperienceiscriticaltoherabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Asaresultofherexecutiveexperience,Ms.Lubelalsohasanunderstandingofcompensationandcorporategovernanceissuesthatweface.Herexperienceasleadattorneyforcomplextransactionswellpositionshertoadviseonanytransactionsthatwemayconsider.Herfamiliaritywithlegalandregulatoryissues,includingexpertiseoncomplexhealth,safety,andenvironmentalmatters,alsopositionsherwelltoadviseonsuchissues.
Richard E. Muncrief. Mr.MuncriefwasappointedPresidentandChiefExecutiveOfficeroftheCompanyonMay15,2014,andonJanuary1,2017hewasappointedChairmanoftheBoardofDirectorsaswell.InDecember2017herelinquishedthetitleofPresidentwhentheBoardtransferredthattitletotheCompany'sChiefOperatingOfficer.HehadearlierservedsinceJune2009asSeniorVicePresident,OperationsandResourceDevelopmentofContinentalResources,Inc.PriortojoiningContinental,hewasemployedfromAugust2008throughMay2009byResourceProductionCompany,whereheservedasCorporateBusinessManager.FromSeptember2007toAugust2008,heservedasPresident,ChiefOperatingOfficerandasadirectorofQuestMidstreamPartners,LP.From1980to2007,heservedinvariousmanagerialcapacitieswithConocoPhillipsanditspredecessorcompanies,BurlingtonResources,MeridianOilandElPasoExploration.Mr.MuncriefholdsaB.S.inpetroleumengineeringtechnologyfromOklahomaStateUniversity.Mr.MuncriefservedasadirectorofApcoOilandGasInternationalInc.("Apco"),amajority-ownedsubsidiaryoftheCompanyuntilJanuary2015,fromAugust2014untilJanuary2015.
WebelieveMr.MuncriefiswellqualifiedtoserveasamemberofourBoard.Mr.Muncriefhasmanyyearsofexperienceintheupstreamandmidstreamenergybusiness,andwebelievethisexperiencewillbecriticaltohisabilitytoidentify,understandandaddressthechallengesand
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opportunitiesthatweface.AsourChairmanandChiefExecutiveOfficer,withintimateknowledgeofourbusinessandoperations,Mr.MuncriefbringsavaluableperspectivetotheBoard.Further,webelievethatMr.Muncrief'sexperiencewithmanagingtheoperationsofalarge,publiccompanyisadvantageoustous.
D. Martin Phillips. Mr.PhillipsisaManagingPartnerofEnCapEnergyCapitalFund,L.P.,whereheplaysaleadershiproleinalllevelsofexecutivemanagementincludinginvestments,fundraising,finance,accounting,complianceandpersonnel.Mr.PhillipsservesontheboardofseveralEnCapportfoliocompaniesandhasalsoservedontheboardofdirectorsofMontageResourcesCorporationsince2011.PriortofoundingEnCapin1989,Mr.PhillipsservedasaSeniorVicePresidentintheEnergyBankingGroupofNationsBankinDallas,Texas.InhiscapacityasManageroftheU.S./InternationalDivisionofNationsBankfrom1987to1989,Mr.Phillipshadresponsibilityforcreditcommitmentstoabroadspectrumofenergy-relatedcompanies.Mr.Phillipsbeganhiscareerin1978withRepublicBankandservedinvariousseniorenergybankingpositions,includingVicePresidentandManagerofRepublicBank'senergyloanproductionofficeinDenver,from1980to1985,andSeniorVicePresidentandDivisionManagerinRepublicBank'sHoustonofficefrom1986to1987.Mr.PhillipsreceivedaBachelorofSciencedegreeandaMasterofBusinessAdministrationdegreefromLouisianaStateUniversity,andheisamemberoftheLSUCollegeofBusinessHallofDistinction.Mr.PhillipsalsoattendedtheStonierGraduateSchoolofBankingatRutgersUniversity.
WebelieveMr.PhillipsiswellqualifiedtoserveasamemberofourBoard.Mr.Phillipshasmanyyearsofexperienceinourindustry,includingexecutiveandinvestmentexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.
Douglas E. Swanson, Jr. Mr.SwansonisaManagingPartnerofEnCapEnergyCapitalFund,L.P.,whereheplaysaleadershiproleinalllevelsofexecutivemanagementincludinginvestments,fundraising,finance,accounting,complianceandpersonnel.Mr.SwansoncurrentlyservesontheboardofseveralEnCapportfoliocompaniesandisalsoontheboardofdirectorsofMontageResourcesCorporationandEarthstoneEnergy,Inc.Inaddition,Mr.SwansonservedontheboardofdirectorsofOasisPetroleum,Inc.anditspredecessorentititiesfromMarch2007untilDecember2017.PriortojoiningEnCapin1999,Mr.SwansonwasinthecorporatelendingdivisionofFrostNationalBankfrom1995to1997,specializinginenergy-relatedservicecompanies,andwasafinancialanalystinthecorporatelendinggroupofSouthwestBankofTexasfrom1994to1995.Mr.SwansonisamemberoftheIndependentPetroleumAssociationofAmericaandtheTexasIndependentProducersandRoyaltyOwnersAssociation.Mr.SwansonreceivedaBachelorofArtsdegreeineconomicsandaMasterofBusinessAdministrationdegreefromTheUniversityofTexas.
WebelieveMr.SwansoniswellqualifiedtoserveasamemberofourBoard.Mr.Swansonhasmanyyearsofexperienceinourindustry,includingexecutiveandinvestmentexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.
Valerie M. Williams. Ms.WilliamshasbeenadirectorsinceMarch2018.ShejoinedErnst&YoungLLPin1981andhasover35yearsofauditandpublicaccountingexperience,servingnumerousglobalcompaniesinvariousindustries,includingenergy,untilherretirementin2016.Ms.Williamsmostrecentlyservedasthefirm'sSouthwestRegionAssuranceManagingPartner,apositionshehadheldsince2006.SheheldseveralseniorleadershippositionsatErnst&Youngandalsoservedonseveralstrategiccommittees,includingthefirm'sPartnerAdvisoryCouncil,InclusivenessCouncil,AuditInnovationTaskForceandtheDiversityTaskForce.Ms.WilliamsholdsaB.S.fromtheUniversityofNorthTexasandanM.B.A.fromtheUniversityofHouston.SheisamemberoftheboardofdirectorsofOmnicomGroup,Inc.(aglobaladvertisingandpublicrelationsfirm)andDTEEnergy(aMichigan-basedelectricandnaturalgasutilitycompany).
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WebelievethatMs.WilliamsiswellqualifiedtoserveonourBoard.Herextensiveexperienceinpubliccompanyaccountingandfinanceandherfamiliaritywithriskmanagementissueswillbecriticaltounderstandingourfinancialperformanceaswellasidentifyingandaddressingthechallengeswefaceintheglobalenergymarkets.
CORPORATEGOVERNANCE
Overview
WPXiscommittedtohighstandardsofcorporategovernanceandethicalbusinessconduct.ImportantdocumentsthatarereflectiveofthiscommitmentincludeourCertificateofIncorporation,Bylaws,CorporateGovernanceGuidelines,chartersofthecommitteesofourBoardofDirectors,ourLeadDirectorCharter,andourCodeofBusinessConduct.Youcanaccessthesedocumentsatwww.wpxenergy.comunder"Investors"and"CorporateGovernance"tolearnmoreaboutourcorporategovernancepractices.
CorporateGovernancePractices
Someofourkeycorporategovernancepracticesinclude:
BoardStructure
• Majority Vote Standard.OurBylawsandCorporateGovernanceGuidelinesprovidethateachdirectormustbeelectedbyamajorityvoteinanuncontestedelection.OurCorporateGovernanceGuidelinesalsoprovidethatadirectornomineemustsubmitanirrevocableresignationeffectiveuponthefailuretoreceivemorevotescast"for"than"against"hisorherelectionorre-electionandBoardacceptanceofsuchresignation.
• Board Leadership Structure.TheBoardbelievesthatindependentleadershipisimportant.TheBoardalsobelievesthat,dependingonwhatappearstobeinthebestinterestsoftheCompanyanditsstockholdersatanygivenpointintime,itshouldbeabletochoosewhethertherolesofChairmanoftheBoardandChiefExecutiveOfficerarecombinedorseparate.IncaseswheretheBoardbelievesthatthoserolesshouldbecombined,theindependentdirectorswillselectfromamongthemselvesanindividualwhoactsasLeadDirector.ThedutiesandresponsibilitiesoftheLeadDirectoraresetforthinaLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com.TheindependentdirectorsassesstheBoard'sleadershipstructureannuallyandconductannualperformanceevaluationsofboththeChairmanoftheBoardandtheLeadDirector.WhenthepositionsofChairmanoftheBoardandChiefExecutiveOfficerarecombined,theperformanceevaluationoftheChairmanoftheBoardroleisinadditiontotheperformanceevaluationoftheChiefExecutiveOfficerrole.
BoardandBoardCommitteesCompositionandPerformance
• Limitation on Public Company Directorships.Adirectormaynotserveonmorethanfourpubliccompanyboardsofdirectors(includingtheCompany's).
• Resignation Upon Change in Status.Eachofourdirectorsisrequiredtoofferhisorherresignationuponamaterialchangeinhisorherstatus,includingachangeinhisorherprincipalbusinessassociations.
• Executive Sessions.OurBoardofDirectorsandeachBoardcommitteeregularlyconductexecutivesessionsofnon-employeedirectors.OurLeadDirectorpresidesovereachexecutivesessionofnon-employeedirectors.CommitteeChairspresideoverexecutivesessionsoftheirrespectivecommittees.
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• Independent Advisors.OurBoardofDirectorsandBoardcommitteeshavetheauthoritytoretainindependentadvisors.
• Annual Performance Reviews.OurBoardofDirectorsandBoardcommitteesconductperformancereviewsannually.
• New Director Orientations.NewdirectorsarerequiredtocompleteanorientationprogramuponjoiningtheBoard,andalldirectorsaregiventheopportunityandareencouragedtoparticipateincontinuingeducationprograms.
GuidelinesandBoardPolicies/Procedures
• Stock Ownership Guidelines.Wemaintainstockownershipandretentionguidelinesfordirectorsandexecutiveofficers.See "Compensation Discussion and Analysis—OtherCompensation Practices—Stock Ownership Guidelines" and "Director Compensation."
• Approval Procedures for Related-Person Transactions.Wehavearelated-persontransactionsapprovalpolicyregardingthereview,approvalandratificationofrelated-persontransactionsinvolvingamemberoftheBoard,oneofourexecutiveofficers,oranyimmediatefamilymemberoraffiliateofsuchindividuals.TheAuditCommitteeandinsomecasesthefullBoardofDirectorsoverseesthisprocess.See"CertainRelationshipsandTransactions."
• Recoupment Policy.WehavearecoupmentpolicythatrequirestheCompanytorecoverallperformance-basedincentivepaymentsfromseniorexecutives,includingallofournamedexecutiveofficers,foundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductresultinginasignificantrestatementoftheCompany'sfinancialstatements.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.See "Compensation Discussion and Analysis—Other Compensation Practices—Recoupment Policy."
• Communications Policy.WehaveacommunicationpolicythatoutlineshowstockholdersandotherinterestedpartiesmaycommunicatewiththeBoardofDirectors.See"BoardCommittees—CommunicationswiththeBoardofDirectors."
• Independent Compensation Consultant.OurCompensationCommitteehasthesoleauthoritytoretainorterminateitscompensationconsultantandannuallyreviewsitscompensationconsultant'sindependence.
• Transactions in Company Securities (Anti-Hedging Policy).Ourinsidertradingpolicyprohibitsshortsalesofsharesofourcommonstockbydirectorsandexecutiveofficers.Italsoprohibitstheuseofequivalentderivativesecuritiesthatwouldhavetheeffectofinsulatinginsidersfromanydownturninthevalueofourcommonstock.
• Anti-Pledging Policy.Ourinsidertradingpolicyprohibitsourdirectors,officers,andkeyemployeesfromholdingoursecuritiesinamarginaccountorusingsuchsecuritiesascollateralforaloan.
• Board Refreshment.Overtime,theBoardrefreshesitsmembershipthroughacombinationofaddingorreplacingdirectorstoachieveappropriatebalancebetweenmaintaininglonger-termdirectorswithdeepinstitutionalknowledgeoftheCompanyandaddingdirectorswhobringadiversityofperspectivesandexperience.Forexample,atourfirstAnnualMeetingof
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Stockholdersin2013,theBoardwascomposedofelevendirectors.Sincethatmeeting,andasoftheconclusionofour2020AnnualMeeting:
• SevenoftheelevendirectorswhowereservingontheBoardin2013willhaveretiredorlefttheBoard.
• FivenewdirectorshavebeenelectedtotheBoard,fourofwhomareindependent.
• TwoofourindependentdirectorshaveservedasLeadIndependentDirector.
• ThecompositionoftheBoard'scommitteeshasbeenrefreshed,andthechairofeachcommitteehasbeenchanged.
IfallofthenomineesareelectedtotheBoard,followingtheAnnualMeeting,theaveragetenureofourdirectorswillbefiveyears.TheBoardbelievesthat,collectively,thedirectorsofferadiverserangeofbackgroundsthatcontributetotheoveralleffectivenessoftheBoard.
Environmental, Social and Governance Initiatives. Wearepursuingavarietyofeffortstoimproveourcommunicationandourperformanceundervariousenvironmental,socialandgovernanceinitiatives.BelowareafewhighlightsfromoursecondESGReportthatisavailableonlineatwww.wpxenergy.com.PleasereviewthecompleteESGReportformoredetails.
AirQuality
• AchievedsignificantreductioninDelawareBasinflaringthroughmorethan$150millionofnewinfrastructuretosupportnaturalgasvolumes
• NewprojectsincludeddoublingthecapacityofourjointventuregasprocessingplantintheDelawareBasinto400MMcf/d
• Expandedourdroneprogramto8certifiedpilotstodigitizeoursurfaceassetsintheWillistonBasintoinspectforfugitiveemissions
Water&Fluids
• ConstructedathirdwaterrecyclingcenterinDelawareBasinduring2019;nowhavecapacitytorecyclemorethan150,000barrelsperday
• Recycled16.1millionbarrelsofproducedwaterin2019intheDelawareBasin;anincreaseof57%vs.2018
Safety
• Fourpreventablemotorvehicleaccidentsacrossmorethan4.4millionmilesdriven
• JoinedthePermianRoadSafetyCoalition;participatedinNovembersafetystand-down
• Fiverecordableemployeeinjuriesin2019acrossmorethan1.5millionhoursworked,resultinginatotalrecordableincidentrate(TRIR)of0.65—upfrom0.43in2018
Diversity&Inclusion
• Womenaccountedfor37percentofourworkforcein2019
• Minoritiesaccountedfor22percentofourworkforcein2019
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CommunityInvestment
• Distributedapproximately$1.4millionincharitablefundsin2019,benefittingmorethan330organizations
• Receivedthe2019CommunityImpactawardfromOklahomaBusinessEthicsforthestructureofourcivicinvolvementprograms
Governance
• InFebruary2019,theBoardamendedtheCharteroftheNominatingandGovernanceCommittee,refocusingitastheNominating,Governance,EnvironmentalandPublicPolicyCommittee.
• DesignatedourtopsafetyandenvironmentalprofessionalasWPX'sESGDirector
IndependentAuditors
• Ratification of Auditor.Ourstockholdersannuallyratifytheselectionofourindependentregisteredpublicaccountingfirm.
• Limited Non-Audit Fees.The2019non-auditandnon-audit-relatedfeespaidtoourindependentregisteredpublicaccountingfirmwerelessthantwentypercentoftotalfeespaidtothatfirmbytheCompanyin2019.
CorporateGovernanceGuidelines
OurCertificateofIncorporationandBylaws,togetherwithDelawarelawandNYSEandSECrules,governtheCompany.OurCorporateGovernanceGuidelinessetforthmanyofthepractices,policiesandproceduresthatprovidethefoundationofourcommitmenttostrongcorporategovernance.ThepoliciesandpracticescoveredinourCorporateGovernanceGuidelinesincludeoperationoftheBoardofDirectors,Boardstructure,directorindependenceandBoardcommittees.OurCorporateGovernanceGuidelinesarereviewedatleastannuallybyourNGEPPCommitteeandarerevisedasnecessary.
CodeofBusinessConduct
OurBoardhasadoptedaCodeofBusinessConductthatappliestoallemployees.OurCodeofBusinessConductispubliclyavailableonourwebsiteatwww.wpxenergy.com.AnywaiverofourCodeofBusinessConductwithrespecttotheChiefExecutiveOfficer,ChiefFinancialOfficerorController,orpersonsperformingsimilarfunctions,maybeauthorizedonlybyourAuditCommittee.Intheeventthatwemakeanychangesto,orprovideanywaiversfrom,theprovisionsofourCodeofBusinessConduct,weintendtodisclosesucheventsonourwebsiteorinareportonForm8-Kwithinfourbusinessdaysofsuchevent.
DirectorIndependence
OurCorporateGovernanceGuidelinesrequirethattheBoardmakeanannualdeterminationregardingtheindependenceofeachofourdirectors.BasedonanannualevaluationperformedbyandrecommendationsmadebytheNGEPPCommittee,theBoardhasdeterminedthateachofourcurrentdirectors,otherthanMessrs.MuncriefandGaspar,isindependentundertheNYSElistingstandardsandtherulesandregulationsoftheSEC.TheBoardhasalsodeterminedthatMr.WilliamG.Lowrie,adirectoroftheCompanyuntilhisretirementinMay2019,wassimilarlyindependentduringhisserviceontheBoard.TheBoard'sdeterminationofindependencetookintoaccountthe"brightline"standardsoftheNYSEandthestandardsforindependencecontainedinourCorporateGovernance
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Guidelines,aswellastheabsenceofanymaterialtransactionsorotherrelationshipsbetweentheCompany,ontheonehand,anddirectors,theirimmediatefamilymembersandotherassociates,ontheother.TheBoardreviewedtransactionsbetweentheCompanyandothercompanieswhereadirectorservesasanon-employeedirector,orwhereadirectororfamilymemberofthedirectorservesasanexecutiveofficer,andconcludedthatnosuchtransactionwascontrarytoafindingofindependence.
BoardLeadershipStructure
OurBoardbelievesthat,dependingonwhatappearstobeinthebestinterestsoftheCompanyanditsstockholdersatanygivenpointintime,itshouldbeabletochoosewhethertherolesofChairmanoftheBoardandChiefExecutiveOfficerarecombinedorseparate.SinceJanuary2017,thepositionsofChairmanoftheBoardandChiefExecutiveOfficerhavebeenheldbyMr.Muncrief.TheBoardbelievesthatMr.Muncrief'sleadershipindevelopingandexecutingtheCompany'sstrategysince2014andhisdeepknowledgeoftheCompany'soperationsenablehimtofacilitatetheBoard'sresponsibilitiesforoverseeingtheCompanyanddrivingitscontinuedeffortstocreatevalueforstockholders.AstheChairmanoftheBoardandChiefExecutiveOfficer,Mr.MuncriefiswellpositionedtoidentifykeyissuesthatcallfortheBoard'sattentionandguidance.
TheBoardalsobelievesthatindependentleadershipisimportant,andtheCompany'sGovernanceGuidelinescallfortheindependentdirectorstoselectfromamongthemselvesaLeadDirectorwhentheroleofChairmanoftheBoardiscombinedwiththeroleofChiefExecutiveOfficer.InMay2018,theindependentdirectorsselectedMr.KindickasLeadDirector.
ThecurrentleadershipstructureoftheBoardisreviewedannuallybytheindependentdirectors.Inaddition,theindependentdirectorsannuallyconductperformanceevaluationsofboththeChairmanoftheBoardandtheLeadDirector.WhenthepositionsofChairmanoftheBoardandChiefExecutiveOfficerarecombined,theperformanceevaluationoftheChairmanoftheBoardroleisinadditiontotheperformanceevaluationoftheChiefExecutiveOfficerrole.
ThedutiesandresponsibilitiesoftheLeadDirectoraresetforthinaLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com,andincludethefollowing:
• presidesatexecutivesessionsoftheindependentdirectorsandhastheauthoritytocalladditionalexecutivesessionsormeetingsoftheindependentdirectors;
• presidesatBoardmeetingsintheabsenceoftheChairmanoftheBoard;
• servesasprincipalliaisonbetweentheChairmanoftheBoardandtheindependentdirectors;
• assistsintheselectionandpreparationofmeetingschedules,agendasandmeetingmaterialsfortheBoard;
• isavailableforconsultationanddirectcommunicationwithmajorstockholdersunderappropriatecircumstances;
• interviews,alongwiththeChairmanoftheBoardandtheChairmanoftheNGEPPCommittee,allBoardcandidates,andmakesrecommendationstotheNGEPPCommittee;and
• oversees,inconsultationwiththeChairmanoftheBoard,theBoard'sannualgoalsandobjectives,whicharesubjecttoapprovalbythefullBoard.
TheBoardbelievesthatitisimportanttohavetheflexibilitytoputinplacealeadershipstructurethatpromoteseffectivegovernanceatanygivenpointintimeandthat,underpresentcircumstances,thecurrentBoardleadershipstructureisinthebestinterestsoftheCompanyanditstockholders.
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RiskOversight
Enterprise-Wide Risk Oversight. OurBoardoverseesmanagement'senterprise-wideriskmanagementactivities,eitherdirectlyorwiththeassistanceofitscommittees.Inthenormalcourseofitsbusiness,theCompanyisexposedtoavarietyofrisks,includingmarketrisksrelatingtochangesincommodityprices,capitalavailability,technicalrisksaffectingtheCompany'sresourcebase,politicalrisks,andrisksinvolvingcybersecurity.TheCompany'sofficersandstaffattendregularlyscheduledmeetingsoftheBoard,wheretheyconductpresentationstotheBoardonvariousstrategicmattersinvolvingtheCompany'soperationsandtherisksthatmayaffectthoseoperations.Freetoaskquestionsorraiseconcernsregardingriskmanagementoranyothermatters,theBoardasawholeandatthecommitteelevelmonitorsthedevelopmentandmanagementofrisksthatmayaffecttheCompany'soperationsandstrategicgoals.DiscussionswiththeBoardregardingtheCompany'scapitalandoperatingplan,businessresults,andcompetitiveenvironmentordinarilyincludeadiscussionoftherisksassociatedwiththeparticularitemunderdiscussion.TheBoard'scommitteesassistintheriskoversightfunctionasfollows:
• TheAuditCommitteeoverseesourfinancialcontrolsandcomplianceactivities,andregularlyevaluatessuchmattersasourfinancialreportinganddisclosure,ourrelationshipswithvendors,andourcapitalinvestmentandprojectexecution.Theenterpriseriskmanagementfunction,whichreportstoourChiefFinancialOfficer,assiststheCompanyinidentifyingandassessingtheCompany'smaterialrisks.TheCompany'sChiefInternalAuditor,whoalwayshasdirectaccesstotheAuditCommittee,assiststheCompanyinevaluatingriskmanagementcontrolsandmethodologies.Inconnectionwithitsoversightrole,theAuditCommitteeregularlymeetsprivatelywithrepresentativesfromtheCompany'sindependentregisteredpublicaccountingfirmandtheCompany'sChiefInternalAuditorandGeneralCounsel.
• TheCompensationCommitteeoverseesriskassociatedwithourhumancapitalandourcompensationpracticesandplans.
• TheNGEPPCommitteeoverseesBoardprocessesandcorporategovernance-relatedrisk,includingrisksrelatedtoenvironmentalhealthandsafety,reputationandbranding,publicpolicyandlegislativeandregulatorymatters.
Enterprise-Wide Incentive Compensation Risk Assessment. WiththeoversightofourCompensationCommittee,weconductedariskassessmentoftheCompany'shumancapitalwithafocusonenterprise-widecompensationprograms.Theriskassessmentreviewedbothincentivecompensationplansandindividualincentiveawardspaidin2019forthepresenceofpotentialdesignelementsthatcouldincentemployeestoincurexcessiverisk.Theassessmentalsotookintoaccountthepresenceofotherdesignfeaturesthatservetomitigateexcessiverisk-taking,suchastheCompany'srecoupmentpolicy,stockownershipguidelines,andbalancedperformancemetrics.
Afterconsideringtheresultsoftheriskassessment,theCompensationCommitteeconcluded,anditsindependentadvisoragreed,thatthelevelofriskassociatedwiththeCompany'senterprise-widecompensationprogramsisnotreasonablylikelytohaveamaterialadverseeffectontheCompany.TheresultsoftheriskassessmentwerereviewedwiththeCompensationCommitteeatameetinginFebruary2020.Pleasesee"Compensation Discussion and Analysis—Other Compensation Practices—Consideration of Risk in Setting Executive Compensation"foradiscussionofdesignelementsintendedtomitigateexcessiverisk-takingbyourexecutiveofficers.
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ExecutiveOfficers
Thefollowingpresentsabriefbiographicaldescriptionofeachofourexecutiveofficers(otherthanMessrs.MuncriefandGaspar,whosebiographicalinformationappearsaboveunder"2020DirectorNominees").
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ExecutiveOfficer BiographicalInformationDennisC.Cameron
Age57
ExecutiveVicePresidentandGeneralCounsel
Mr.CameronhasservedasExecutiveVicePresidentandGeneralCounselsinceNovember2018andearlierservedasSeniorVicePresidentandGeneralCounselsinceDecember2013.Priortothattime,Mr.CameronhadservedasVicePresidentandDeputyGeneralCounseloftheCompanysinceJuly2013andAssistantGeneralCounselfromJanuary2012toJuly2013.Mr.Cameronhasover25yearsoflegalexperience.HestartedhiscareerinMay1987atGableGotwals,afull-servicelawfirm.From2008,Mr.CameronwasamemberoftheBoardofDirectorsofthefirm.Mr.Cameron'spracticeatGableGotwalsconsistedprimarilyofcomplexlitigationinvolvingenergyinterestsincludingthedefenseofclassactionsandincludedcommerciallitigationwithanemphasisinoil&gasissues,productsliabilityandenvironmentallaw.Mr.Cameronservedasnationalcounseltoamajoroil&gascompanyonroyalty,severancetaxesandquitammattersandregionalcounseltotwootheroil&gascompaniesonsimilarmatters.Mr.Cameronalsorepresentedthreemajoroil&gascompaniesonFederalandIndianoil&gasmattersrelatedtoproductionthroughouttheUnitedStatesandoffshore.Mr.CameronwasselectedasNationalProductsliabilitycounseltoaninternationaltoolmanufacturer.Mr.CameronreceivedaBachelorofScienceinMechanicalEngineeringfromtheUniversityofOklahomaandJurisDoctorfromtheUniversityofOklahomaCollegeofLaw.
BryanK.Guderian
Age60
ExecutiveVicePresidentofBusinessDevelopment
Mr.GuderianhasservedasExecutiveVicePresidentofBusinessDevelopmentsinceFebruary2018andearlierservedasSeniorVicePresidentofBusinessDevelopmentsinceMay2016.Priortothattime,Mr.GuderianservedasSeniorVicePresidentofBusinessDevelopmentandLandfromOctober2014untilMay2016,andasSeniorVicePresidentofOperationsfromDecember2011untilOctober2014.From1998untilDecember2011,Mr.GuderianservedasVicePresidentoftheExploration&ProductionunitofTheWilliamsCompanies,Inc.withresponsibilityforoperationalandcommercialmanagementofexplorationandproductionassetsintheMarcellusShale,theSanJuanBasinandotherbasins.Mr.GuderianalsohadresponsibilityforoverseeingWilliams'internationaloperations.HeservedasadirectorofApcoInternationalOilandGasInc.("Apco")from2002until2015andadirectorofPetroleraEntreLomasS.A.from2003until2015.Mr.GuderianservedasChiefExecutiveOfficerofApcofrom2013until2015.Mr.GuderianjoinedWilliamsin1991asagasmarketingrepresentative.Mr.GuderianholdsabachelorofbusinessadministrationdegreeinpetroleumlandmanagementfromtheUniversityofOklahoma.
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BoardMeetingsandAnnualMeetingAttendance
DirectorsareexpectedtoattendBoardmeetings,meetingsofcommitteesonwhichtheyserveandtheAnnualMeetingofStockholders.DuringtheyearendedDecember31,2019,theBoardofDirectorsheldelevenmeetings.AlldirectorswhoweremembersoftheBoardofDirectorsin2019attendedatleast75%ofthemeetingsoftheBoardandanyBoardcommitteesofwhichtheyweremembers.Eachofourdirectorsattendedour2019AnnualMeetingofStockholders.
BoardCommittees
TheBoardofDirectorshasestablishedthreestandingcommittees:theAuditCommittee,theCompensationCommitteeandtheNGEPPCommittee.ThesecommitteeshelptheBoardofDirectorsfulfillitsresponsibilitiesandassisttheBoardofDirectorsinmakinginformeddecisions.Eachcommitteeoperatespursuanttoawrittencharter,eachofwhichisavailableonourwebsiteatwww.wpxenergy.com,andevaluatesitscharterandconductsacommitteeperformanceevaluationannually.
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ExecutiveOfficer BiographicalInformationJ.KevinVann
Age48
ExecutiveVicePresidentandChiefFinancialOfficer
Mr.VannhasservedasExecutiveVicePresidentandChiefFinancialOfficersinceFebruary2018.HeearlierservedasSeniorVicePresidentandChiefFinancialOfficersinceMarch2014.Mr.VannalsoservedasTreasurerfromSeptember2014toNovember2014andfromNovember2018untilFebruary2020.PriortohisappointmentasSeniorVicePresidentandChiefFinancialOfficer,Mr.VannhadservedasVicePresident,ChiefAccountingOfficerandControllersinceDecember2011.FromJune2007untilDecember2011,Mr.VannhadservedasControllerfortheexplorationandproductionbusinessunitofTheWilliamsCompanies,Inc.HewasControllerforWilliamsPowerCompanyfrom2006to2007andDirectorofEnterpriseRiskManagementforWilliamsfrom2002to2006.InhisControllerpositions,hewasresponsibleforthedevelopmentandimplementationofinternalcontrolstoensureeffectivefinancialandbusinesssystems,accuratefinancialstatementsandthetimelyprovisionofappropriateinformationandanalysistoassistinthestrategicmanagementofthecompany.AsDirectorofEnterpriseRiskManagementforWilliams,hewasresponsiblefortheaggregationandmeasurementofcommodityandcreditrisk.Mr.VannalsoservedasadirectorofApcoOilandGasInternationalInc.from2014to2015.Mr.VannholdsaB.S.inaccountingfromOklahomaStateUniversity.
AngelaE.Kouplen
Age46
SeniorVicePresident—AdministrationandChiefInformationOfficer
Ms.KouplenhasservedasSeniorVicePresident—AdministrationandChiefInformationOfficersinceNovember2018.SheearlierservedasVicePresident—AdministrationandChiefInformationOfficersince2016,andasVicePresident—InformationTechnologiessince2015.PriortothattimeandsinceDecember2011,Ms.KouplenservedtheCompanyinavarietyofpositionsininformationtechnology,contractmanagementandleadershipandorganizationaldevelopment.Shehasmorethan20yearsofexperienceinenergy,managementandinformationsystems.Ms.KouplenholdsaB.S.inmanagementfromOklahomaStateUniversityandanMBAfromtheUniversityofTulsa.
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Thedirectorsserveonthecommitteesassetforthbelow.
AuditCommittee
TheAuditCommitteeconsistsofMessrs.Carrig(Chair)andKurzandMs.Williams,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherulesandregulationsoftheSECandeachofwhomisfinanciallyliterate.TheBoardofDirectorshasdeterminedthateachofMessrs.CarrigandKurzandMs.Williamshasaccountingorrelatedfinancialmanagementexpertiseandisqualifiedasan"auditcommitteefinancialexpert"asdefinedbytherulesandregulationsoftheSEC.YoushouldunderstandthatthesedesignationsaredisclosurerequirementsoftheSECandtheNYSErelatingtothemembers'experienceandunderstandingofaccountingandauditingmatters.ThesedesignationsdonotaffecttheobligationsorliabilityofBoardorAuditCommitteemembersgenerally.TheAuditCommitteeisresponsibleforoverseeingouraccountingandfinancialreportingprocessesandauditsofourfinancialstatements,publicdisclosureandcomplianceactivitiesandfortheselectionandretentionoftheindependentregisteredpublicaccountingfirm.TheAuditCommitteeheldeightmeetingsin2019.
CompensationCommittee
TheCompensationCommitteeconsistsofMessrs.Lentz(Chair)andHerdman,andMs.Lubel,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherulesandregulationsoftheSECandeachofwhommeetsthedefinitionofanoutsidedirectorundertheInternalRevenueCodeof1986,asamended(the"IRC").TheCompensationCommitteeisresponsibleforoverseeingthedesignandimplementationofstrategicexecutivecompensationprogramsthatpromotetheattraction,retention,andappropriaterewardofexecutiveofficersandaredesignedtomotivatetheCompany'sexecutiveofficerstowardtheachievementofbusinessobjectivesandtoaligntheexecutiveofficers'focuswiththelong-terminterestofthestockholders.TheCompensationCommitteealsomakesrecommendationstotheBoardregardingthecompensationofourChiefExecutiveOfficerandassiststheBoardinfulfillingitsresponsibilitytooverseetheestablishmentandadministrationoftheCompany'scompensationprograms,includingincentivecompensation,equity-basedplans,andrelatedmattersforemployeessubjecttoSection16oftheSecuritiesExchangeActof1934,asamended(the"ExchangeAct").TheCompensationCommitteealsomonitorscompliancebydirectorsandtheexecutiveofficerswiththeCompany'sstockownershipguidelines.TheCompensationCommitteeheldsixmeetingsin2019.
Nominating,Governance,Environmental&PublicPolicyCommittee
TheNominating,Governance,Environmental&PublicPolicyCommittee,or"NGEPPCommittee,"consistsofMessrs.Kindick(Chair)andWorkandMs.Lubel,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherulesandregulationsoftheSEC.TheNGEPPCommittee'sdutiesincludeindentifyingandrecommendingqualifiedindividualstobeproposedasnomineesforelectiontotheBoardattheannualmeetingofstockholdersanddeveloping,reviewingannuallyandrecommendingtotheBoardchangestoourCorporateGovernanceGuidelines.TheNGEPPCommitteealsoreviewsthesizeandcompositionoftheBoardanditscommitteesandrecommendsanychangestotheBoard,establishesaprocessforandassessesdirectorindependenceandoverseestheevaluationoftheBoardanditscommittees.
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Audit Compensation NGEPPJohnA.Carrig,Chair HenryE.Lentz,Chair KeltKindick,ChairKarlF.Kurz RobertK.Herdman KimberlyS.LubelValerieWilliams KimberlyS.Lubel D.MartinPhillips DouglasE.Swanson,Jr. DavidF.Work
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Inaddition,followinganamendmenttoitscharterthattheBoardapprovedinFebruary2019,theNGEPPCommitteeassiststheBoardinitsoversightofenvironmental,safetyandpublicpolicymatters,includingamongotherresponsibilities:
• Overseemanagement'smonitoringandenforcementoftheCompany'spoliciestoprotectthehealthandsafetyofemployees,contractors,customersandthepublic;
• Overseemanagement'smonitoringandenforcementoftheCompany'spoliciestoprotecttheenvironment;
• Reviewemergingpolitical,socialandenvironmentaltrendsandmajorgloballegislativeandregulatorydevelopmentsorotherpublicpolicyissuesthatmayaffecttheCompanyanditsoperations;
• OverseetheCompany'spoliciesandpracticespromotingdiversityandinclusion,aswellastheCompany'shumanandworkplacerightsandpolicies;and
• ReviewtheCompany'spolicyadvocacyefforts,includingallpoliticalcontributions,toconfirmalignmentwithCompanypoliciesandvalues.
TheNGEPPCommitteeheldfourmeetingsin2019.
CommunicationswiththeBoardofDirectors
Anystockholderorotherinterestedpartymaycommunicatewithourdirectors,individuallyorasagroup,theLeadDirector,ortheindependentdirectorsasagroup,bycontactingourCorporateSecretaryortheChairmanoftheBoard.ThecontactinformationismaintainedontheInvestorRelationspageofourwebsiteatwww.wpxenergy.com.
Thecurrentcontactinformationisasfollows:
WPXEnergy,Inc.3500OneWilliamsCenterTulsa,Oklahoma74172Attn:CorporateSecretary
Wewillforwardcommunicationstotherelevantdirector(s)unlessthecommunicationsareofapersonalnatureornotrelatedtothedutiesandresponsibilitiesoftheBoardofDirectors,including,withoutlimitation,junkmail,massmailings,businesssolicitations,spam,surveysandroutineproductorbusinessinquiries.
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EXECUTIVECOMPENSATION
ExecutiveSummary
Afterourmulti-yeartransformationofWPX,ouroil-pronepositionsintheDelaware(Permian)andWillistonBasinsnowformthefoundationofWPX.OuracreagepositionsineachofthesebasinscontainsomeofthetopgeologyintheplaysandinNorthAmerica.Notableachievementsinclude:
• Establishmentofnew5-yearvision/goals,presentedtoinvestorsduringthirdquarterwebcast;
• WPXsharesclosed2019up21%(comparedtoanaverageofdown13%forourpeergroup);
• Monetizingequitypositionsintwomidstreaminvestmentsresultingin$500millioninproceedsfrominvestmentsof$125millionandretiringdebtwiththemajorityoftheseproceeds;
• Beganexecutingasharerepurchaseprogram;
• AnnouncingtheacquisitionofFelixEnergy,oneofthehighestqualityDelawareBasinoperators,whichclosedonMarch6,2020;
• IssuingseniordebtinSeptember2019usingtheproceedstoconducttenderoffersforouroutstandingseniornotes,resultinginthereductionofouryearoveryearcashinterestexpenseof$4millionandextendingdebtmaturities;and
• Completingasecond200MMcf/dcryogenicprocessingtrainatajointventuregasplant.
Our2019annualincentivemetrics—AdjustedEBITDAX,ProductionGrowthperDebtAdjustedShare,DevelopmentCost,ControllableCosts,EnvironmentalandSafety,andaDiscretionarycomponent—effectivelyincentedourexecutiveofficerstofocusonthestrategicimperativestodeliverimprovedshareholderreturn.OurexecutivemanagementteamsuccessfullycontinuedourCompany'stransformationtoafocusonoilproduction.Ourstrategicimperativesinclude:
• Financialdiscipline;
• Operationalexcellence;
• Valuecreationandrecognition;and
• Cultivatingourtalent.
UnderourAnnualIncentivePlan("AIP"),weawarded159.8%oftargetbaseduponperformanceagainstpre-definedmetrics,theEnvironmentalandSafetyandtheDiscretionarycomponents.See"Annual Cash Incentive"foradditionalinformationabouttheannualincentivemetricsandhowtheawardwascalculated.
Ourlong-termincentiveplanprovidesthatawardswillvestat200%oftargetifourTSR,themetricusedtomeasureperformance,isfirstorsecondamongourpeergroup.RegardlessofwhereourTSRfallsrelativetothepeercompanies,payoutiscappedat100%ifourabsoluteTSRisnegativeoverthethree-yearperformanceperiod.OurTSRofnegative19.3%forthethree-yearperiodfrom2017-2019wassecondinourpeergroup.Placingsecondinourpeergroupwouldnormallyresultina200%payoutforourperformance-basedRSUs;however,becauseabsoluteTSRwasnegative,thepayoutforthe2017performance-basedRSUswascappedat100%oftarget.See"Vesting of 2017 Performance-Based RSUs"foradditionalinformationaboutthisaward.
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CompensationDiscussionandAnalysis
Ourexecutivecompensationprogramincludesseveralfeaturesdesignedtoaligntheinterestsofourexecutiveofficerswiththeinterestsofourstockholders:
• ThemajorityofcompensationpaidtoourCEOandourPresident&COOisperformance-based;
• Weuseabalancedapproachtoperformancemetricstofocusallexecutiveofficersonexecutingourstrategywhilediscouragingexcessiverisk-taking;
• Ourstockownershipguidelinesrequireourexecutiveofficerstohaveasignificantstakeinourlong-termsuccessandaligntheirinterestswithstockholderinterests;
• TheCompensationCommittee(the"Committee")regularlyreviewsoverhanglevelsandtheannualrunrate;
• Ourrecoupmentpolicyrequiresrecoveryofallperformance-basedincentivepaymentsfromexecutiveofficersfoundtoberesponsibleforfraudorintentionalmisconductthatresultsinasignificantrestatementofourfinancialresultsaswellasrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults;
• Ourchange-in-controlagreementshavea"doubletrigger"forcashpayments,equityawards,andotherbenefitssotheyarenottriggeredsolelyonachange-in-control;
• WeprovideverylimitedperquisitestoourNamedExecutiveOfficers("NEOs");
• TheCommitteeengagesanindependentcompensationconsultanttoprovidecompetitivemarketdataforourexecutiveofficersandtoleaddiscussionsontrendswithinourindustry;and
• Whenmakingcompensationdecisions,theCommitteeusestallysheetstoconsidertotaloutstandingequityvalueandestimatesofamountsthatwouldbepaidinvariousterminationscenarios.
Inaddition,wehaveadoptedpoliciesandprovisionstoensurewedonotengageinpracticesthatcouldbedetrimentaltostockholders:
• Ourperformance-basedRSUprogramprohibitspayoutsinexcessof100%oftargetifabsoluteTSRisnegative,regardlessoftherankingofourTSRrelativetopeers;
• Wedonotprovideemploymentcontractstoanyofourexecutiveofficers;
• Wedonotprovidegross-upstocoverpersonalincometaxesthatpertaintoseverancebenefitsorthelimitedperquisitesweoffer;
• Ourinsidertradingpolicyprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesbyourdirectorsandexecutiveofficers;
• Wedonotpermitournon-employeedirectorsorexecutiveofficerstoengageinmargintradingofourstock;
• Ouranti-pledgingpolicyprohibitsourdirectorsorexecutiveofficersfromholdingourcommonstockinamarginaccountorpledgingourcommonstockascollateralforaloan;and
• Ourincentiveplanprohibitstherepricingofstockoptionswithoutstockholderapproval.
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CompensationPhilosophy
Weprovideacompetitivetotalrewardsprogramdesignedtoattract,engage,reward,andretainhighlyeffectiveexecutiveofficerstodeliveronourbusinessplananddriveresultsthatincreasestockholdervalue.WeintendtomaintaincompensationprogramsthatareinthebestinterestofWPXandourstockholderswhilerewardingourexecutiveofficersthroughapaymixthatbalancesshort-andlong-termperformanceanddiscouragesexcessiverisk-taking.Establishingthepropercompensationmixiscriticaltoourpay-for-performanceapproachinengagingexecutiveofficerstocarryoutourbusinessstrategy.
TheCommitteebelievespayforourexecutiveofficersshouldemphasizeperformance-basedrewardsandtheuseofequity.Performance-basedcompensation,whichincludestheAIPandperformance-basedRSUs,comprisesamajorportionofourexecutivecompensation,whilebasesalaryisamuchsmallerpercentage.Equity,whichdirectlyalignsourexecutives'interestswiththoseofourstockholders,comprisesamuchgreaterportionofcompensationtoourNEOsthancashcompensation.
Weimplementourcompensationphilosophyby:
• MakingamajorityofourCEO'sandofourPresident&COO'spayperformance-based,subjecttoincreasewhenweexceedperformancetargetsandreductionwhenwedonotachieveperformancetargets;
• Tyingpaytoperformancemetricsthatencompassbothshort-andlong-termgoalsandencourageprofitablegrowthwhilediscouragingexcessiverisk-taking;and
• Deliveringamajorityofcompensationintheformofequity,whichdirectlytiestheinterestsofourNEOstostockholdersandcausesthevalueoftheircompensationtovarybaseduponourstockprice.
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DeterminationofTotalCompensation
RoleoftheCommitteeandBoardofDirectors
TheCommitteeoverseesthedesignandimplementationofourcompensationprograms,includingapprovingperformancemetricsandgoalsforourannualandlong-termincentives,andapprovescompensationfortheNEOs,exceptfortheCEO.FortheCEO'scompensation,theCommitteemakesrecommendationstotheindependentmembersoftheBoardofDirectors,whichhasresponsibilityforapprovingtheCEO'scompensation.TheCommitteemakesdecisionswithrespecttoexecutiveofficercompensationbasedonthefollowingfactors:
• TheperformanceofeachexecutiveofficerandthevalueoftheroletoWPX;
• MarketdatafromourpeergroupandthebroaderE&Pindustry;
• Internalpayequityconsiderations,suchasrelativescopeofresponsibilityofeachposition;
• InputfromtheCEO(forexecutiveofficersotherthanhimself);and
• InputfromtheCommittee'sindependentcompensationconsultant.
ThroughoutthisCompensationDiscussionandAnalysis,whenreferencesaremadetodecisionsabouttheCEO'scompensation,thosedecisionsweremadebytheindependentmembersoftheBoardofDirectorsafterconsideringtherecommendationoftheCommittee.
Considerationof2019StockholderAdvisoryVotetoApprove2018ExecutiveCompensation
In2019,wereceivedafavorableadvisoryvoteonourexecutivecompensationprogram,withapproximately97.3%percentoftheCompany'ssharesrepresentedandeligibletovoteattheannualstockholdersmeetingvotinginfavoroftheexecutivecompensationprogram.TheCommitteedidnotchangeitsapproachin2019basedontheresultsoftheadvisoryvote.TheCommitteewillcontinuetomonitorandconsidertheoutcomeoftheannualadvisoryvoteonourexecutivecompensationprogramwhenmakingdecisionsforourexecutiveofficers.
RoleoftheCommittee'sIndependentCompensationConsultant
TheCommitteeretainsanindependentconsultant,FWCook,toadviseonexecutiveanddirectorcompensationmatters,assesstotalcompensationlevelsandelementsofpayforexecutiveofficers,evaluatecompetitivecompensationtrends,andidentifyanappropriatepeergroupforexecutivecompensationplanning.Inaddition,theindependentcompensationconsultantmanagestheprocessbywhichtheBoardofDirectorsevaluatestheCEO'sperformance.TheCommitteemeetswithitsindependentconsultantwithinandoutsidethepresenceofmanagementandhasthesoleauthoritytoretainandterminateitsindependentconsultant,includingsoleauthoritytoapproveitsfeesandretentionterms.FWCookprovidesnootherservicestoWPXanddoesnotperformanyworkformanagement.
ConsistentwiththerequirementintheCommittee'scharter,theCommitteeannuallyreviewstheindependenceofitscompensationconsultantconsideringthefactorssetforthintheNYSElistingstandards.For2019,theCommitteefoundthatFWCookcontinuestomeettheNYSElistingstandardsforindependence.
RoleofManagementandExecutiveOfficers
AlthoughmanagementprovidesinputtotheCommitteeasitsetsperformancemetricsandgoalsforourannualandlong-termincentives,managementdoesnotsetcompensationforourexecutiveofficers.OurCEOprovideshisevaluationoftheperformanceoftheexecutiveofficersthatreporttohimandmakescompensationrecommendationstotheCommittee,whichthendetermines
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compensationfortheseexecutiveofficers.OurCEOalsoprovidesanassessmentofhisownperformancetoboththeCommitteeandtheBoardofDirectorsbutdoesnotparticipateintheprocessofsettinghisowncompensation.
CompetitivePositioning
TheCommitteemakesdecisionsabouttheappropriatemixbetweenfixedandvariablepayandbetweencashandequity.TheCommitteemakesthesedecisionsinthecontextofthecompetitivemarketforexecutivetalent,whilealsoconsideringhoweachelementofpayfurtherstheobjectivesofourcompensationprogram.Toevaluatethismarket,theCommittee,withtheadviceandassistanceofitsindependentcompensationconsultant,considersproxydata,surveydatabothfromadesignatedgroupofpeercompaniesandfromabroadergroupofE&Pcompanies.
Withinputfromitsindependentcompensationconsultant,theCommitteeusedthefollowingselectioncriteriatoidentifyourgroupofpeercompanies:
• Oil&GasE&Pcompanies;
• Scaleintermsofenterprisevaluewithadditionalconsiderationgiventoassetsize,marketcapitalization,revenueandtotalproduction;
• Whetherthecompanyisacompetitorforbusiness,investorcapital,orexecutivetalent;
• Whetherthecompanyhasasimilarcorporatestructurefocusedonhorizontaldrillingusinghydraulicfracturingtechnologyineithermultiplebasinsorasinglebasinstrategictoourbusiness;and
• Whetherthecompanyhasasimilarcommoditymix.
Usingthesecriteria,inJuly2019theCommitteeidentifiedthecompanieslistedbelowasthepeergroupforexecutivecompensationmarketevaluationsfor2020.Thisgroupreflectstheacquisitionsoftwomembersofthepeergroupusedforthe2019marketevaluations—EnergenCorporationandNewfieldExplorationCompany—andtheadditionoftwonewpeers—DevonEnergyandMarathonOilCorp.—whichbothhaveprofilessimilartoWPX.
Ourmethodologyforselectingpeercompanieshasresultedinincludingsomecompaniesthatarebothsmallerandlargerthanweare.TheCommitteehasdetermineditisimportanttoincludethesecompaniesinthepeergroupbecausewecompetedirectlywiththemforbothbusinessandtalentandbecauseoftheirinfluenceonthemarketforexecutivetalentintheE&Pindustry.
TheCommitteeevaluatesthecompaniescomprisingthepeergroupannuallyandmakeschangesasnecessarytoensureWPXisusinganappropriategroupofcompanies.
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CimarexResourcesCompany OasisPetroleum,Inc.
ConchoResourcesInc. Ovintiv,Inc(formerlyknownasEncanaCorporation)
ContinentalResourcesInc. ParsleyEnergy,Inc.
DevonEnergy PioneerNaturalResourcesCompany
DiamondbackEnergy,Inc. QEPResources,Inc.
LaredoPetroleum,Inc. SMEnergyCompany
MarathonOilCorp. WhitingPetroleumCorporation
MatadorResourcesCompany
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UseofTallySheetsandWealthAccumulationAnalysis
Whenmakingexecutivecompensationdecisions,theCommitteereviewscomprehensivetallysheetinformationforeachofourexecutiveofficers.ThesetallysheetsarepreparedbymanagementandreviewedbytheCommittee'sindependentcompensationconsultant.Thetallysheetsquantifytheelementsofeachexecutiveofficer'stotalcompensation,includingtotaloutstandingequityandestimatesofamountsthatwouldbepaidintheeventofachange-in-controlandotherterminationscenarios.
ElementsofourCompensationProgram
Our2019executivecompensationprogramincludedthefollowingfourelements.Eachelementisdesignedtoachieveaspecificobjectivethat,whenbalancedwiththeotherelements,achievesourpay-for-performancephilosophyandalignstheinterestsofourexecutiveswithourstockholders.
Inallocatingamongtheelementsofourcompensationprogram,theCommitteeevaluatesmarketdatawhilealsoconsideringourcompensationphilosophy.See"CompensationPhilosophy"foradiscussionofhowtheCommitteeimplementsthisphilosophy.
Althoughbasesalaryandannualcashincentivesareimportantcomponentsofanexecutiveofficer'stotalcompensation,equityisthemostsignificantelement.FortheCEO,long-termincentivesmakeup78%ofhis2019targettotaldirectcompensation("TTDC").ForotherNEOs,onaverage,long-termincentivesare70%ofTTDC.
BaseSalary
Attractingandretainingtalentwithacompetitivebasesalaryisthefirstbuildingblockofourcompensationprogram.Ourbasesalariesareintendedtohelpattracthighlyqualifiedcandidatesandprovideastablesourceofincomesoourexecutiveofficerscanfocusonday-to-dayjobresponsibilities.
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TheCommitteetypicallysetsbasesalarylevelsforourexecutiveofficersinFebruaryofeachyear.Baseduponmarketdata,theCommitteeapprovedmodestbasesalaryincreasesforallofourNEOs.Basesalariesfor2019were:
AnnualCashIncentive
OurexecutiveofficersareeligibleforcashincentiveseachyearunderourAIP.TheAIPrepresents12%ofourCEO'sTTDCand14%ofTTDCforourotherNEOs.TheAIPisdesignedtofocusexecutiveofficersonachievingtheannualbusinessplanlinkedtoourstrategy.Executionagainsttheannualplanisimportanttodrivelonger-termstockholdervaluebycreatingfinancialstrength,managingcosts,andinvestinginprojectsthatwilldeliverfuturevalue.Weemploybalancedperformancemetricstofurtherspecificobjectivesofourstrategy,suchasachievementofplan,costmanagement,cashflow,capitalefficiency,andsafety.
For2019,theCommitteesettheAIPperformancemetricsasAdjustedEBITDAX,ProductionGrowthperDebtAdjustedShare,DevelopmentCost,ControllableCosts,EnvironmentalandSafetyandaDiscretionarycomponent.Theobjective,definition,andrelativeweightingofeachofthe2019AIPperformancemetricsisasfollows:
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Executive 2018BaseSalary
2019BaseSalary
DollarIncrease
PercentIncrease
RichardE.Muncrief $ 900,000 $ 950,000 $ 50,000 5.6%J.KevinVann 500,000 520,000 20,000 4.0%ClayM.Gaspar 550,000 575,000 25,000 4.5%BryanK.Guderian 436,720 450,000 13,280 3.0%DennisC.Cameron 386,250 400,000 13,750 3.6%
Metric Objective Definition Weighting AdjustedEBITDAX CashFlow Earningsbeforeinterestexpense,incometaxes,
depreciation,depletionandamortization,andexplorationexpenses.Impactfromdiscontinuedoperationsandnon-cashitemssuchasimpairmentsandmark-to-marketmovementsrelatedtocommodityhedgesisremoved.
20%
ProductionGrowthperDebtAdjustedShare
ProductionGrowth
Annualproductiongrowththatisnormalizedforanychangesindebtorequity.Thismetricmonitorsmanagement'sabilitytoresponsiblygrowproductioninashareholderfriendlymanner.
20%
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TheBoardofDirectorsengagesinarigorousprocesseachyearwhensettingtheannualbusinessplan.TheCommitteethenconsiderstheannualbusinessplanwhensettingtheAIPtargets.Becausewe
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Metric Objective Definition Weighting DevelopmentCost CapitalEfficiency DevelopmentcapitaldividedbyEstimated
UltimateRecoveryforwellswithfirstsalesfromOctober1,2018throughSeptember30,2019.Thismetricisaleadingindicatorofourcapitalallocationprocessandensuresweareinvestinginthehighestratesofreturnwithinourportfolio.Thismetricwillalsodepicthowthecompanyismanagingcapitalspendversustheultimaterecoverablereserves.
20%
ControllableCostsCosts
Thesumofthefollowingitems,dividedbyannualequivalentproductionvolume($/BOE):
20%
• Leaseoperatingexpenses—liftingcostsandworkovers
• Facilityoperatingexpenses • Gathering,processingandtransportation
expenses
• Generalandadministrativeexpenses
Environmental&SafetySafety
BasedupontheCommittee'sdiscretionaryassessmentoftheCompany'soverallenvironmentalandsafetyrecordfortheyear;ManagementprovidesregularreportsofenvironmentalandsafetyactivitiesandoutcomestoassisttheCommitteeinevaluatingperformance.
5%
DiscretionaryOverallCompanyPerformance
Basedonfactorssuchasrelativereturnstoshareholders,netcashflow,returnoncapitalemployed,investorconfidence,managementleadershipandreputation,costinitiatives,managingliquidity,prior-yearreserverevisions,environmental,socialandgovernancefactorsnototherwiseincludedinEnvironmental&SafetyandotheritemsthatreflectonoverallWPXperformance.
15%
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usedaggressiveassumptionswhenwedevelopedthe2019annualbusinessplan,theCommitteebelievedsettingAIPtargetstotheannualbusinessplanensuredasufficientlevelofdifficultysothatachievingthegoalswouldgeneratestockholdervaluecreation.Theassumptionsintheannualbusinessplanincluded:
• Oiltradingat$50perbarrelandnaturalgastradingat$3perMMBtu;and
• FiverigsinthePermianBasinandthreerigsintheWillistonBasin.
Thetablebelowshowsthethreshold,target,andmaximumpayoutlevelsforeachperformancemetric,aswellasactualperformanceresultsagainstthefourquantifiablemetrics.
TheCommitteedeterminedtheactualAIPawardstobepaidtotheNEOsbasedon:
• Performanceagainsttargetsforthefourformulaicperformancemetricsinthetableabove;
• TheCommittee'sassessmentoftheCompany'soverallperformanceandattainmentofcriticalobjectivesasreflectedintheEnvironmentalandSafetymetricsandDiscretionarymetrics(seebelow);and
• Individualperformanceofeachexecutive,thoughnoadjustmentsforindividualperformanceweremadein2019.
InevaluatingtheperformanceoftheNEOsinordertosettheawardpayoutpercentagefortheDiscretionaryandEnvironmental&Safetycomponents,theCommitteeconsideredfinancialandoperationalaccomplishmentsduringtheyear.Highlightsoftheseaccomplishmentsinclude:
• Establishmentofnew5-yearvision/goals,presentedtoinvestorsduringthirdquarterwebcast;
• WPXsharesclosed2019up21%(comparedtoanaverageofdown13%forourpeergroup);
• Monetizingequitypositionsintwomidstreaminvestmentsresultingin$500millioninproceedsfrominvestmentsof$125millionandretiringdebtwiththemajorityoftheseproceeds;
• Beganexecutingasharerepurchaseprogram;
• AnnouncingtheacquisitionofFelixEnergy,oneofthehighestqualityDelawareBasinoperators,whichclosedonMarch6,2020;
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PerformanceMetric Weighting Threshold Target Maximum AttainmentResults
AttainmentAgainstTarget
AwardPayout
AdjustedEBITDAX($Million) 20% 1,065 1,253 1,441 1,380 110.1% 33.5%%ofTarget 85% 100% 115%
ProductionGrowthperDebtAdjustedShare(%) 20% 23 24 26 25.8 107.7% 38.0%%ofTarget 96% 100% 108.5%
DevelopmentCost($/BOE) 20% 6.98 6.35 5.08 5.94 106.9% 26.5%%ofTarget 90% 100% 120%
ControllableCosts($/BOE) 20% 13.80 12.56 11.30 12.13 103.6% 26.8%%ofTarget 90% 100% 110%
EnvironmentalandSafety 5% N/A N/A N/A 7.5%%ofTarget N/A N/A N/A
Discretionary 15% N/A N/A N/A 27.5%%ofTarget N/A N/A N/A
AwardPayout% 50% 100% 200% 159.8%
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• IssuingseniordebtinSeptember2019usingtheproceedstoconducttenderoffersforouroutstandingseniornotes,resultinginthereductionofouryearoveryearcashinterestexpenseof$4millionandextendingdebtmaturities;
• Completingasecond200MMcf/dcryogenicprocessingtrainatajointventuregasplant;
• Reducedflaringrateby50%in2019vs.2018intheDelawareBasin;
• ExpandedourdroneprogramtoeightcertifiedpilotstodigitizeoursurfaceassetsintheWillistonBasin,whichwillenhanceourinspectionforfugitiveemissions;
• Recycled16.1millionbarrelsofproducedwaterin2019intheDelawareBasin,anincreaseof57%vs.2018;
• Handledmorethan188millionbarrelsofoilandwateracrossourWillistonandDelawareBasinsystemsin2019,withaspillpreventionrateof99.988%;and
• Fiverecordableemployeeinjuriesin2019acrossmorethan1.5millionhoursworked.
Baseduponthesefactors,theCommitteeapprovedthefollowing2019AIPawardpayoutstotheNEOs.
Long-TermIncentives
TheannualequitygranttoourNEOsincludesperformance-basedRSUsandtime-basedRSAs.Theseequityvehiclesmeetanumberofbusinessobjectives,includingretention,aligninginterestsofNEOswiththeinterestsofstockholders,andencouragingperformancethatleadstostockpriceappreciationandthecreationofstockholdervalueoverthelong-term.
TheCommitteesetstargetsforequitycompensationbasedonmarketdatafromourpeergroupandinternalequityconsiderationssuchasrelativescopeofresponsibilitiesofeachposition.Basedonthesefactors,for2019theCommitteesetthefollowingequitytargetsforourNEOs.
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Executive TargetPercentage
(%ofEligibleEarnings) TargetAward
Value ActualAward
Paid(1) RichardE.Muncrief 120% $ 1,130,769 $ 1,806,969J.KevinVann 90% 465,231 743,439ClayM.Gaspar 100% 571,154 912,704BryanK.Guderian 80% 358,366 572,669DennisC.Cameron 80% 319,746 510,954
(1) Thetargetawardvalueandactualawardpaidarebasedonactualeligibleearningsfortheyear.Theterm"EligibleEarnings"includesregularbasepay,holidaypay,andpaidtimeoffearnedduringtheyear
Executive Performance-Based
RSU(1) Time-Based
RSAs 2019Equity
Target RichardE.Muncrief $ 4,500,000 $ 3,000,000 $ 7,500,000J.KevinVann 1,181,250 1,181,250 2,362,500ClayM.Gaspar 1,980,000 1,320,000 3,300,000BryanK.Guderian 875,000 875,000 1,750,000DennisC.Cameron 700,000 700,000 1,400,000
(1) ThesevalueswilldifferfromthevaluesintheSummaryCompensationTableduetotherequirementtoreportinamannerconsistentwithAccountingStandardCodification(ASC)718.
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Basedonbothmarketdataandourobjectivetodeliveramaterialproportionofequitycompensationintheformofperformance-basedincentives,theCommitteesetthefollowingequityallocationforourNEOs.
EquityMixofthe2019AnnualGrant
Webelieveitisimportantthatamaterialportionofgrantstoallexecutiveofficersbeintheformofperformance-basedequity.Further,wehavegrantedahigherproportionofperformance-basedRSUstotheCEOandPresident&COOthantotheotherexecutiveofficerstomoredirectlyaligntheinterestsoftheCEOandPresident&COOwithourstockholders.
Performance-BasedRestrictedStockUnits
Wegrantourexecutiveofficersperformance-basedRSUstofocustheireffortsonlong-termperformance.TheperformanceperiodforthoseRSUsisthreeyears.TheperformancemetricisrelativeTSR,ascomparedtoagroupofourpeercompanies,furtherstrengtheningthealignmentwithstockholders.ThepeergroupusedforevaluatingrelativeTSRforthe2019awardconsistsofthesamecompaniesusedtobenchmarkpay.
See"Competitive Positioning"aboveforadiscussionofhowweselectpeercompanies.TSRiscalculatedasfollows:
RelativeTSRassessesthestrengthofourreturntostockholdersbycomparingittotheTSRofourpeercompanies.UsingrelativeTSRasthelong-termperformancemetric,therefore,causesourexecutiveofficerstofocusonexecutingourstrategyandcreatingvalueforstockholders,evenineconomicdowntimes.Itminimizestheimpactofshort-andmid-termmovementsinshareprice,causingexecutiveofficerstofocusonenhancingvalueoverthelong-term.Additionally,relativeTSRfocusesourexecutiveofficersonoutperformingourcompetitorsbecauseitlinkstheirpaytohowourstockpricecomparestothestockpriceofourpeercompanies.Webelieverewardingexecutiveofficersforachievingresultswithintheircontrolandincentingthemtofocusonoutperformingourcompetitorswillleadtoincreasedstockholdervalue.
Atthebeginningoftheperformanceperiod,theCommitteeestablishestheperformanceobjectiveandapprovesgrantstoourexecutiveofficersofacertainnumberofRSUsbasedontheirindividualequitytargetandtheequitymixdescribedabovein"Long-Term Incentives."Attheendofthethree-yearperformanceperiod,theCommitteedeterminesthepayoutpercentagefortheperformance-
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TSR%= (Stockpriceaverageoverthequarterattheendofperiod–Stockpriceaverageoverthequarterimmediatelypriortostartofperiod+Dividendspaid)
Stockpriceaverageoverthequarterimmediatelypriortostartofperiod
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basedRSUsbasedonourrelativeTSRduringthatperformanceperiod.Ourexecutiveofficershavetheopportunitytoreceivefrom0%to200%oftheawardgrantedbasedonhowourTSRcomparestothepeergroupattheendoftheperformanceperiod.
RegardlessofwhereourTSRfallsrelativetothepeercompanies,payoutiscappedat100%ifourabsoluteTSRisnegativeoverthethree-yearperformanceperiod.Performanceatthefirstandsecondrankingsrelativetopeersearnsa200%payoutwhenabsoluteTSRispositive.Performancebelow25%resultsinnopayout.
TSRPerformance
Becausewesetourequitygrantvaluesbasedoncompetitivemarketdata,theperformance-basedequityawardsaredesignedtopayoutat100%oftargetformedianpeergroupperformancewithhigherperformanceresultinginawardsabovetheequitytargetandlowerperformanceresultinginawardsbelowthetargetvalue.Asaresult,whenweperformbetterthanthemajorityofthecompaniesinourpeergroup,ourexecutiveofficersearnanawardabovethetargetvalueatthetimeofgrant.Conversely,whenourTSRisinthebottomhalfofourpeergroup,ourexecutiveofficersearnlessthanthetargetawardvalue.
Vestingof2017Performance-BasedRSUs
In2017,wegrantedperformance-basedRSUstoourexecutiveofficers,includingallfiveofourcurrentNEOs.Underthetermsofthegrant,TSRrelativetothepeergroupdesignatedatthetimeofgrantwastheperformancemetric.Thethree-yearperformanceperiodendedonDecember31,2019.ThecumulativeabsoluteTSRoverthethree-yearperformanceperiodwasnegative19.3%whichwassecondinourpeergroup.Placingsecondinourpeergroupwouldnormallyresultina200%payoutforourperformance-basedRSUs;however,becauseabsoluteTSRwasnegative,thepayoutforthe2017performance-basedRSUswascappedat100%.Webelievetheseawardsoperatedasintendedbylinkingtheperformanceourexecutivesdelivertothepaytheyreceive.
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ThepeergroupformeasuringourrelativeTSRforthe2017performance-basedRSUswascomprisedof:
TheCompensationCommitteedecidedthatanymemberofthepeergroupthatceasestobepubliclytradedduringtheperformanceperiodwillnotbeincludedwiththeremainingpeersforpurposesofdeterminingtheCompany'stotalshareholderreturnrelativetothepeergroup.Therefore,EnergenCorporationandNewfieldExplorationCompanywereremovedfromthepeergroupduetoacquisitions.
Thefollowingtablesummarizesthepayoutofthe2017performance-basedRSUs.
Time-BasedRestrictedStockAwards
Wegranttime-basedRSAstopromotelong-termretentionofexecutiveofficersandpermitthemtoaccumulateequityownershipintheCompanysotheinterestsofourmanagementteamaredirectlyalignedwiththeinterestsofourstockholders.Webelieveitisimportanttohaveanelementofcompensationthatisfocuseddirectlyonretainingtalentsowecanminimizepotentiallossofinstitutionalknowledgeandthedisruptioninherentinunplannedturnover.Time-basedRSAsalsoalignourexecutiveofficerswithourstockholdersbymakingthemstockholdersthemselvesandtyingtheirpersonal,long-termwealthtothesuccessoftheCompany.Retainingtalentandaligninginterestsencouragesourexecutiveofficerstotakeactionstoenhancethevalueofourbusinessandincreasestockholdervalue.Time-basedRSAsvestratablyoverathree-yearperiod.
BenefitsandLimitedPerquisites
Weprovidecompetitivebenefitstoallouremployees,includingourexecutiveofficers,topromotehealthandfinancialwell-being.Thesebenefitsincludehealth,life,anddisabilityinsurance.Long-termdisabilitycoverageisprovidedatabaselevelof60%ofbasesalary,withamaximumof$15,000permonth.Inaddition,eligibleemployees,areabletopurchasesupplementallong-termdisabilitycoveragebringingthetotalupto70%ofbasesalary,withacombinedmaximumbenefitof$15,000permonth.
41
CimarexEnergyCo. OasisPetroleumInc.ConchoResources,Inc. ParsleyEnergy,Inc.
ContinentalResources,Inc. PioneerNaturalResourcesCo.DiamondbackEnergy,Inc. QEPResources,Inc.EPEnergyCorporation SMEnergyCompanyLaredoPetroleum,Inc. WhitingPetroleumCorporation
MatadorResourcesCompany
Executive PBRSUsGranted
GrantDayValue
#ofPBRSUs
Forfeited(0%)
PBRSUsVesting
BasedUponPerfAttainmentandVestingDateStockPrice(100%)
TotalValueReceived
BasedUponPerformanceAttainmentandVestingDateStock
Price
TotalValueLostBasedUponStock
PriceDepreciation(1)
RichardE.Muncrief 261,058 $ 3,357,206 0 261,058 $ 2,370,407 $ (986,799)J.KevinVann 72,516 932,556 0 72,516 658,445 (274,111)ClayM.Gaspar 90,645 1,165,695 0 90,645 823,057 (342,638)BryanK.Guderian 54,387 699,417 0 54,387 493,834 (205,583)DennisC.Cameron 36,258 466,278 0 36,258 329,223 (137,055)
(1) Basedupongrant-dateclosingpriceof$12.86onMarch3,2017,andavestingpriceof$9.08
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Ourretirementprogramconsistsofbothaqualified401(k)definedcontributionplanandtwononqualifieddeferredcompensationplans.Underthequalified401(k)plan,theCompanymatchesemployeecontributionsdollar-for-dollarupto6%ofpay,subjecttoInternalRevenueCode("IRC")contributionlimits,andalsomakesanadditionalcontributiontoallemployeesofeither6%or8%ofeligiblepay,dependingontheemployee'sage.
Thetwononqualifiedplansarearestorationplanandavoluntarydeferralplan.Therestorationplanprovidesbenefitsequaltotheamountthatwouldbepayableunderthequalified401(k)planintheabsenceofcertainlimitationsoftheIRC.Ourexecutiveofficersalsoareeligibletoparticipateinavoluntarynonqualifieddeferredcompensationplan,whichallowsdeferralofupto75%ofbasesalaryandupto100%ofannualcashincentives.Deferralstothenonqualifieddeferredcompensationplanarematchedupto6%ofpaythatisnotrecognizedwithinthequalified401(k)plan.
Wealsoprovidethefollowinglimitedperquisitestoourexecutiveofficerswithanaimofattractinghighlyqualifiedcandidatesandallowingourexecutiveofficerstofocusonjobresponsibilities:
• Financial Planning Reimbursement.WereimburseNEOsforfinancialplanningtoprovidethemwithexpertiseoncurrenttaxlaws,personalfinancialplanning,andpreparationsforcontingenciessuchasdeathanddisability.WebelieveencouraginganNEOtoworkwithafinancialplannermaximizestheretentionandengagementaspectsofthedollarswespendontheseprograms.Thefinancialplanningreimbursementislimitedto$7,500annually;
• Personal Use of WPX Energy's Company Aircraft.WeprovidelimitedpersonaluseofCompanyaircraftattheCEO'sdiscretion.TheprimarypurposeofourCompanyaircraftisforbusinessuse,buttheCEOretainsdiscretiontopermitpersonalusewhenhedeemsappropriate,suchaswhencommercialairtravelisinefficientduetocostsoradditionaltraveltimebecausethedestinationisnotwellservedbycommercialairlines,orforpersonalemergencies;and
• Executive Physicals.Executiveofficerphysicalsalignwithourwellnessinitiativeaswellasassistusinmitigatingrisk.Thesephysicalsreducevacancysuccessionriskbyhelpingtheexecutiveidentifyandpreventissuesthatcouldleavearoleunexpectedlyvacated.
OtherCompensationPractices
StockOwnershipGuidelines
Itisimportantfortheinterestsofourexecutiveofficerstoalignwiththoseofourstockholders.OnewayweaccomplishthisisbyrequiringourexecutiveofficerstoholdcertainlevelsofWPXstockunderstockownershipguidelinesadoptedbytheBoardofDirectorsandmonitoredbytheCommittee.
ThesestockownershipguidelinesdefinetheminimumlevelsofWPXstockourexecutiveofficersmustown.Eachexecutiveofficermustholdcommonstockortime-basedRSUsorRSAsofWPXwithavalueatleastequaltothefollowingmultipleofhisorherbasesalaryineffectasofDecember31oftheprioryear.
Stockoptions,whethervestedornot,areexcludedfromthenumberofsharesownedincalculatingcompliancewiththeseguidelines.Unvestedtime-basedRSAscounttowardsatisfactionoftheownershiprequirementswhileunvestedperformance-basedRSUsdonot.
If,ontheannualcompliancedateofFebruary1,anexecutiveofficerdoesnotownsharesofWPXcommonstockwithavalueequaltotherequiredmultipleofbasesalary,thatexecutiveofficeris
42
ExecutiveLevel MultipleofBaseSalary
CEO 6OtherExecutiveOfficers 3
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requiredtoretain50%ofanyWPXequityacquiredthroughtheexerciseofstockoptionsorthevestingoftime-basedRSAsorperformance-basedRSUs,netoftaxes,untilthenextcompliancedatewhenhisorherWPXstockownershipmeetstherequiredmultipleofbasesalary.ForFebruary1,2020compliancedate,allNEOssatisfiedtheirstockownershipguidelines.
ConsiderationofRiskinSettingExecutiveCompensation
Ourperformancemanagementsystemevaluatesallemployees,includingourexecutiveofficers,notonlyonresultsbutalsoonhowresultsareachieved.Inotherwords,wewillnotseekresultsatallcosts.Achievingresultsinawaythatisconsistentwithourvaluesisanimportantpartofourculture.Thiscultureisoneofthewaysweareabletosetaggressiveperformancegoalsandencourageappropriateandresponsiblerisk-takingwhilediscouragingimprudentrisks.TheCommitteehasdiscretiontoadjustindividualannualincentiveawardsbasedonanevaluationofhowexecutiveofficersachieveresults,includingtheavoidanceofunduerisks.
TheCommitteealsomitigatesriskbyusingbalancedperformancemetrics.Forexample,ourannualcashincentiveprogrammeasuresAdjustedEBITDAX,ProductionVolumesperDebtAdjustedShare,andDevelopmentandControllableCosts.Togetherthesemetricsencourageourexecutiveofficerstomakedecisionsthatgrowstockholdervalueoverthelongterm.Inaddition,theEnvironmentalandSafetycomponentincentsexecutiveofficerstomakeprudentdecisionswithrespecttoenvironmentalandsafetyissues.Finally,theDiscretionarycomponentallowstheCommitteetoevaluateotherfactorstoassurethatinpursuingannualperformanceobjectivesourexecutiveofficersalsofocusonultimatevaluecreationandsustainabilityofperformance.
WhiletheCommitteebelievesitisimportanttoemphasizepay-for-performanceinourexecutivecompensationprogram,italsorecognizestheneedtobalancefixedpaywithvariablepayandshort-termincentiveswithlong-termincentivestoavoidplacingtoomuchemphasisonshort-termresults.Alackofbalancebetweenannualincentivesandlong-termincentivescouldcauseourexecutiveofficerstotakeundueriskswhenseekingtodriveshort-termperformance.Inaddition,theCommitteeretainsdiscretioninbothourannualincentiveprogramandourlong-termincentiveprogramtoadjustabove-targetpayoutsdownwardforanyreason,includingexcessivelyriskybehavior.
Ourexecutivecompensationprogramincludesseveralfeaturesdesignedtolimitunduerisks.Forexample,thereisacaponpayoutsunderbothourshort-andlong-termincentiveplans.TheCommitteehasadoptedstockownershipguidelinestoalignourexecutiveswithstockholdersandarecoupmentpolicytoremovetheincentivetoinflateperformance-basedawards.Inaddition,theBoardofDirectorshasadoptedanti-hedgingandanti-pledgingpolicies.Annually,weconductanenterprise-wideassessmentofmaterialrisksassociatedwithourpolicies,programs,andactionsrelatedtohumancapital,includinganyrisksthatmightberaisedbyourcompensationprograms.TheCommitteereviewsthisriskassessmenteachyear.
Intheeventourfinancialresultsaresignificantlyrestatedduetofraudorintentionalmisconduct,theBoardofDirectorswillreviewanyperformance-basedincentivepaymentspaidtoexecutiveofficers.Wewill,totheextentpermittedbyapplicablelaw,seekrecoupmentofallperformance-basedincentivepaymentsfromanyexecutiveofficerfoundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductthatcausedtheneedfortherestatement.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.
TheCommitteehastakenactiontoclarifythatourrecoupmentpolicywillbeinterpretedandappliedasnecessarytocomplywithSECandstockexchangerequirements.IftheSECissuesfinalrulesandtheNYSEadoptsrelatedlistingstandardsimplementingtheprovisionsoftheDodd-FrankActrelatedtorecoupment,theCommitteewilladoptanynecessaryconformingchangestoourrecoupmentpolicy.
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Anti-HedgingandAnti-PledgingPolicies
SECrulesgenerallyprohibituncoveredshortsalesofourcommonstockbyourexecutiveofficers.Ourinsidertradingpolicyalsoprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesthatwouldhavetheeffectofinsulatinginsidersfromanydownturninthevalueofourcommonstock.Thepolicyalsorequiresalldirectors,executiveofficersandkeyemployeestoconsultwithourCorporateSecretary(orwithourGeneralCounselorChiefFinancialOfficerifourCorporateSecretaryisnotavailable)beforetheyengageinanytransactionforthepurchaseorsaleofoursecurities.Ourinsidertradingpolicyalsoprohibitsholdingourcommonstockinamarginaccountorpledgingourcommonstockascollateralforaloan.
EmploymentAgreements
Noneofourexecutiveofficershaveemploymentagreements.
TerminationandSeveranceArrangements
Ourexecutiveseverancepayplanprovidesbenefitstoexecutiveofficersincertainterminationscenarios.AnexecutiveofficermayparticipateintheplanwhentheCEOapprovesareductioninforce,ajobelimination,oraninvoluntaryterminationwithoutcause.ForofficersotherthantheCEO,theamountofseverancepayisdeterminedbymultiplyingtheseveredexecutiveofficer'sannualbasesalaryandaverageannualincentive(basedupontheexecutiveofficer'sactualincentivesearnedoverthepriorthreeyears)by1.5.TheamountofseverancepayfortheCEOisdeterminedbymultiplyingtheCEO'sannualbasesalaryandaverageannualincentive(basedupontheCEO'sactualincentivesearnedoverthepriorthreeyears)by2.Theplanincludespaymentattargetfortheproratedannualcashincentivefortheyearoftermination.Inaddition,theseverancepayplanprovidesalumpsumpaymentequalto12monthsoftheseveredexecutiveofficer'smedicalplancoverage.ThepurposeofthislumpsumpaymentistoprovidethefinancialequivalentofCOBRAplanratesfor12monthsofcoverage.Theplanincludesoutplacementassistanceof$25,000.Consistentwithourpastpractice,theseverancepayplanprovidesthatthetreatmentofoutstandingequityawardsisgovernedbythetermsofthegrantagreementissuedatthetimetheequitywasgranted.Ingeneral,ourequityawardagreementsprovideforeithervestingorpro-ratedvestingforseveredemployees.Toparticipateintheplan,theemployeemustexecuteaseveranceandrestrictivecovenantagreementwhichmaycontain,amongotherprovisions,non-competitionandnon-solicitationcovenants.
Change-in-Control
EachofourNEOsispartytoanindividualchange-in-controlagreement.Ourchange-in-controlagreements,inconjunctionwiththeNEOs'RSU,RSA,andstockoptionagreements,provideseparationbenefitsfortheNEOsintheeventofachange-in-controlandaredesignedtoencourageNEOstofocusonthebestinterestsofourstockholdersbyalleviatingconcernsaboutapossibledetrimentalimpacttotheirowncompensationunderapotentialchange-in-control.Ourprogramincludesadoubletriggerforcashpayments,benefits,andequityvesting.Thismeanstheremustbeachange-in-controlandtheNEO'semploymentmustbeinvoluntarilyterminatedbythesuccessorcompanyortheNEOmusthaveterminatedhisorheremploymentforgoodreasoninorderforbenefitstobetriggeredundertheagreement.Forexample,whiletheFelixacquisitionsatisfiedthetriggerrelatedtoanentityacquiringtwenty-fivepercent(25%)ormoreofourcommonstock,nobenefitshavebeenpaidunderourchange-in-controlagreementsbecausenoNEOshavebeeninvoluntarilyterminatedorresignedforgoodreason.Ouragreementsdonotcontainanexcisetaxgross-upprovision,butinsteadprovidea"bestnet"provisionprovidingNEOswiththegreateroftheirafter-taxbenefitcappedatthesafeharboramountortheirbenefitpaidinfull(subjectingthemtopossibleexcisetaxpayments).
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TheCommitteereviewsourchange-in-controlbenefitsperiodicallytoevaluatewhethertheyareconsistentwithcompetitivepracticeandalignedwithourcompensationphilosophy.Aspartofthesereviews,calculationsareperformedtodeterminetheoverallprogramcostifachange-in-controleventweretooccurandallcoveredNEOswereterminated.Anassessmentofcompetitivenorms,includingthereasonablenessofthetypesandamountofcompensationreceived,isusedtovalidatebenefitlevelsforachange-in-control.TheCommitteebelievesthatofferingachange-in-controlprogramisappropriateandcriticaltoretainingandattractingexecutivetalentandkeepingthemalignedwiththeinterestsofourstockholdersiftherewasachange-in-control.
Inconnectionwithitsreviewofourchange-in-controlbenefitsin2018,theCommitteedetermineditwouldbeintheCompany'sbestinteresttomodifythechange-in-controlvestingprovisionsincludedinourperformance-basedRSUs.Previously,theperformance-basedRSUsawardagreementsprovidedthattheawardwouldvestandpayouttotheterminatedemployeebasedupontargetperformance.TheCommitteeapprovedamendmentstooutstandingperformance-basedRSUagreementstoprovidethat,uponaterminationofemploymentfollowingachange-in-control,performance-basedRSUswillvest,andthepayoutwillbebaseduponactualperformancefromtheaward'sgrantdatetothedateimmediatelypriortothechange-in-control.Nootherprovisionswerechanged,andthedoubletriggervestingrequirementuponachange-in-controlremainsineffect.Inadditiontoamendingoutstandingawardsofperformance-basedRSUs,thisprovisionforvestingbaseduponactualperformancewillapplytofuturegrantsofperformance-basedRSUs.Thischangebetteralignswithourpay-for-performancephilosophy,soexecutivesarerewardedbaseduponactualresultsachievedinsteadoftarget.
ThefollowingchartdetailsthebenefitsreceivedifanNEOweretobeterminatedorresignedforadefinedgoodreasonfollowingachange-in-controlaswellasananalysisofthosebenefitsasitrelates
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totheCompany,stockholders,andtheNEOs.See"Change-in-ControlAgreements"belowforfurtherdisclosureofourchange-in-controlprogram.
AccountingandTaxTreatment
TheCommitteeconsiderstheimpactofaccountingandtaxtreatmentwhendesigningallaspectsofpay,buttheprimarydriverofourprogramdesignistosupportourbusinessobjectivesandlinkexecutivepaytoperformance.
PriortotheTaxCutsandJobsActof2017,Section162(m)oftheIRCprovidedanexceptiontothedeductibilitylimitationsforperformance-basedcompensationthatmetcertainrequirements.BecauseSection162(m)hasnowbeenamended,weexpectthatequityawardsgrantedorothercompensationprovidedunderarrangementsenteredintoormateriallymodifiedafterNovember2,2017,generallywillnotbedeductibletotheextenttheyresultincompensationtocertainexecutiveofficersthatexceeds$1millioninanyoneyearforanysuchofficer.In2019,theCommitteecompensatedexecutiveofficersinamannerdesignedtopromotevaryingcorporategoalsinthebestinterestofthecompany,includingourpay-for-performancephilosophy,despitethefactthatthecompensationwillnotbefullydeductibleunderSection162(m).
46
Change-in-ControlBenefit BenefittoWPXandStockholders BenefittoExecutiveOfficerMultipleofbasesalaryplusaverageannualcashincentive Encouragesexecutiveofficerstoremainengagedandstay
focusedonsuccessfullyclosingthetransaction Financialsecurityfortheexecutiveofficerequivalenttotwoyearsofcontinuedemployment(threeyearsforourCEO)
Proratedannualcashincentivepaidattargetforyearoftermination
Encouragesexecutiveofficerstoremainengagedandstayfocusedonsuccessfullyclosingthetransaction
Theexecutiveofficersarekeptwhole,iftheyhaveaseparationfromservicefollowingachange-in-control
Acceleratedvestingofequityawards Anincentivetostayduringandafterachange-in-control
Ifthereisriskofforfeiture,executiveofficersmaybelessinclinedtostayortosupportthetransaction
Theexecutiveofficersarekeptwhole,iftheyhaveaseparationfromservicefollowingachange-in-control
Cashpaymentof18monthsofcontinuationofhealthcoverage(ifenrolledincoverageattimeoftermination)
AminimalcosttotheCompanythatcreatesacompetitivebenefit
Coverssomeofthecostofcontinuinghealthcoverage
Reimbursementoflegalfeestoenforcebenefit KeepsexecutiveofficersfocusedonWPXandnotconcernedaboutwhethertheacquiringcompanywillhonorcommitmentsafterachange-in-control
Securityduringanuncertaintimeperiod
Outplacementassistance Keepsexecutiveofficersfocusedonsupportingthetransactionandlessconcernedabouttryingtosecureanotherposition
Assistsexecutiveofficersinfindingacomparableexecutiveposition
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2020BusinessTransformationAward
Beginningin2014undertheleadershipofournewlyhiredCEO,RickMuncrief,WPXembarkedonamulti-yearbusinesstransformation"WPX2020Vision"whichincludedastrategicshiftincommoditymix,portfoliooptimizationtofocusonkeybasins(e.g.,Permian,Williston),emphasisoncostcontrolanddevelopmentoftoptierinfrastructure,increaseofmarginsandreturns,andestablishmentofacultureofaccountability.Aspartofthetransformationstrategy,WPXrestructuredtheleadershipteamwhichincludedthehiringofClayGasparandthepromotionofKevinVann,BryanGuderian,andDennisCameron.Despiteindustryheadwinds,includingincreasedregulationsandalowercommoditypriceenvironment,thecompanywassuccessfulintransformingthebusinessunderthisleadershipteam:
• High-gradedtheportfoliothroughmorethan$10billioninexecutedAcquisition&Divestitureactivity;
• DramaticallyboostedWPX'slong-term,high-returnoildrillinginventorythroughopportunisticDelawareBasinacquisitions;
• Reducedleveragebyexecutingonnon-coreassetsales,capitaldiscipline,andopportunisticdebtreduction;
• Strategicallydevelopedamidstreaminfrastructureportfolio,includingajointventure,toprovideflowassuranceandmonetizationopportunities;and
• Beganexecutingasharerepurchaseprogram.
HavingmetandexceededtheWPX2020Vision,theCompanyannouncedanewfive-yearvisionforshareholdersinNovember2019.Theplanincludesgeneratingfreecashflow,drivingdoubledigitROCE,reducingnetdebt,repurchasingstockandinitiatingadividend.InDecember2019,theCompanyannouncedthetransformativeacquisitionofFelixEnergyfor$2.5billion,whichrepresentsanothersignificantstepintheCompany'scommitmenttodeliveringshareholdervalue.
InFebruary2020,theCompensationCommitteeandtheBoardofDirectorsapprovedaspecialone-time50%enhancementtothe2020valueofthelong-termincentiveawardsmadetothenamedexecutiveofficers.Theone-timeenhancement,deliveredentirelyinequity-basedcompensation,isintendedtoenhancethealignmentbetweenourshareholdersandournamedexecutiveofficers,recognizethesuccessfulbusinesstransformationcompletedundertheWPX2020Vision,rewardeffortsrelatedtothesuccessfulcloseandintegrationofthetransformativeFelixacquisition,promoteleadershipretentionanddrivecontinuedprogresstowardthenewfive-yearvision.
Indevelopingtheformandsizeofthespecialone-timeenhancement,theCompensationCommitteeconsideredtheCompany'shistoricalperformanceonanabsolutebasisandrelativetopeers,historicalpayoutsundertheannualcashincentiveplanandthelong-termincentiveplan,andtheexpectedincreaseintimeandservicerequiredoftheexecutive'saboveandbeyondtheirday-to-dayresponsibilitiesthatwillberequiredtoleadthesuccessfulexecutionofourstrategicprioritiesincludingtheintegrationoftheFelixtransaction.
Thespecialone-timeenhancementisallocated50%intime-basedRSAsthatvestratablyoverathree-yearperiod,and50%inperformance-basedrestrictedstockunitssubjecttorelativeTSRperformanceoverathree-yearperiod.Theperformanceconditionsarethesameasthoseforthestandardannualperformance-basedrestrictedstockunits,includingtheperformancemeasurementperiod,relativecomparatorgroupusedtobenchmarkpay,andtheperformanceandassociatedpayoutranges.TheCompanybelievesthatitisimperativetodeliverhalfofthespecialenhancementintheformofperformance-basedrestrictedstockunits.Thedecisiontoenhancethevalueoftheexistinglong-termincentiveprogram,asopposedtodevelopingaseparateprogram,wastomaintainfocuson
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drivinglong-termshareholdervaluecreationandinrecognitionofourshareholdersbroadsupportfortheexistinglong-termincentiveprogram.
Overthepastfiveyears,ourmanagementteamhasmetwithover150investorsannuallytodiscussawiderangeoftopics,includingcorporategovernance,environmental,socialandgovernance(ESG)issues,andexecutivecompensation.FeedbackfrominvestorsissharedwiththeCompensationCommitteeandisoneofmanyconsiderationsduringourexecutivecompensationprogramreview.Ourinvestorshavegenerallybeensupportiveofourcompensationprogramsandourlong-termincentiveplaninparticular.InvestorfeedbackcanandhasinfluencedchangesincompensationplandesignasevidencedbytheCompany'sadoptionofaproductiongrowthperdebtadjustedsharemetricin2019andincreasedweightingandemphasisonESGgoalsin2020.Wewillcontinuetomaintainanopendialoguewithourinvestorstoensureourprogramscontinuetoalignwiththeirinterests.
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2019SummaryCompensationTable
ThefollowingtablesetsforthcertaininformationwithrespecttothecompensationoftheNEOsearnedduringfiscalyears2019,2018,and2017.
49
ExecutiveandPrincipalPosition Year Salary(1) Bonus Stock
Awards(2)
Non-EquityIncentivePlanCompensation(3)
ChangeinPensionValueand
NonqualifiedDeferred
CompensationEarnings(4)
AllOtherCompensation(5) Total
RichardE.Muncrief 2019 $ 942,308 $ 0 $ 8,247,624 $ 1,806,969 $ 0 $ 337,401 $ 11,334,302ChairmanoftheBoardand 2018 894,615 0 8,837,813 1,279,300 0 313,639 11,325,367ChiefExecutiveOfficer 2017 861,154 0 6,754,445 1,108,305 0 343,582 9,067,486
J.KevinVann 2019
516,923
0
2,554,392
743,439
0
125,717
3,940,471
ExecutiveVicePresidentand 2018 496,615 0 2,897,973 516,480 0 103,115 4,014,183ChiefFinancialOfficer 2017 475,231 0 2,187,083 444,816 0 113,604 3,220,734
ClayM.Gaspar 2019 571,154 0 3,628,941 912,704 0 187,751 5,300,550
PresidentandChief 2018 550,000 0 4,017,164 643,500 0 180,602 5,391,266OperatingOfficer 2017 514,846 0 2,733,854 484,560 0 173,779 3,907,039
BryanK.Guderian 2019
447,957
0
1,892,144
572,669
0
104,657
3,017,427
ExecutiveVicePresident 2018 434,763 0 2,253,963 443,674 0 94,441 3,226,841ofBusinessDevelopment 2017 422,154 0 1,640,312 345,744 0 103,341 2,511,551
DennisC.Cameron 2019 399,683 0 1,513,721 510,954 0 117,953 2,542,311
ExecutiveVicePresident 2018 384,519 0 1,287,984 349,913 0 104,137 2,126,553andGeneralCounsel 2017 373,308 0 1,093,541 305,739 0 118,814 1,891,402
(1) Salary:Actualsalarypaidmaydifferfromtheannualrateduetothenumberofpayperiodsduringtheyearandtheeffectivedateofsalaryincreases.
(2) StockAwards:AmountsshownforallyearsarethegrantdatefairvalueoftheawardscalculatedinaccordancewithASC718.
2019Performance-BasedRSUMaximumPotential
Executive TargetAward
MaximumAward
RichardE.Muncrief $ 5,280,748 $ 10,561,496J.KevinVann 1,386,191 2,772,382ClayM.Gaspar 2,323,527 4,647,054BryanK.Guderian 1,026,809 2,053,618DennisC.Cameron 821,450 1,642,900
(3) Non-EquityIncentivePlanCompensation:TheamountsreportedintheNon-EquityIncentivePlanCompensationcolumnreflecttheamountsearnedbyNEOsundertheCompany'sAIP.ForadiscussionoftheperformancecriteriaestablishedbytheCommitteeforawardsundertheAIP,see"ElementsofourCompensationProgram—Annual Cash Incentive"above.
(4) ChangeinPensionValueandNonqualifiedDeferredCompensationEarnings:WPXdoesnotsponsorapensionplan.AllinvestmentsintheNonqualifiedDeferredCompensationPlanareinorbasedonmutualfundsorotherpubliclyavailabletradinginstrumentswithnopremiumsorguaranteedearnings.
(5) AllOtherCompensation:AmountsshownrepresentpaymentsmadebyWPXonbehalfoftheNEOs.Thetotalincludesitemssuchas401(k)matchingandnoncontributorycontributions,WPXnonqualifiedrestorationplanemployercontributionsandWPXnonqualifieddeferredcompensationplanmatchingcontributions,andperquisites(ifapplicable).ThedetailonexecutiveandWPXcontributionsmadetobothnonqualifiedplansareincludedinthe2019NonqualifiedDeferredCompensationTable.Perquisitesincludefinancialplanningservices,anannualexecutivephysicalexam,andpersonaluseoftheCompanyaircraft.Mr.Muncrief,Mr.Vann,Mr.GasparandMr.Cameronexceeded$10,000inperquisites.Mr.Muncrief'sperquisitesincludedfinancialplanning($3,935)andpersonaluseoftheCompanyaircraft($22,441).Mr.Vann'sperquisitesincludedfinancialplanning($7,500),executivephysical($4,285)andpersonaluseoftheCompanyaircraft($12,260).Mr.Gaspar'sperquisitesincludedfinancialplanning($7,500),executivephysical($3,455)andpersonaluseoftheCompanyaircraft($6,745).Mr.Cameron'sperquisitesincludedfinancialplanning($7,500),executivephysical($3,096)andpersonaluseoftheCompanyaircraft($2,413).TheincrementalcostmethodwasusedtocalculatethepersonaluseoftheCompanyaircraft.Theincrementalcostmethodincludesvariablecostssuchasfuel,unscheduledmaintenance,airportservices,pilotmeals,pilotovernightexpensesandcatering.Thecostforfinancialplanningandexecutivephysicalsareactualexpensesreimbursedorpaid.EmployercontributionstoNonqualifiedDeferredCompensationandNonqualifiedRestorationplansonbehalfofthenamedexecutiveofficerareasfollows:Mr.Muncrief($274,025),Mr.Vann($64,672),Mr.Gaspar($133,052),Mr.Guderian($59,330),andMr.Cameron($67,943).
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2019OutstandingEquityAwards
ThefollowingtablesetsforthcertaininformationwithrespecttooutstandingequityawardsheldbytheNEOsattheendofthefiscalyear2019.
50
OptionAwards StockAwards
Executive GrantDate
NumberofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable
NumberofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable
EquityIncentivePlan
Awards:NumberofSecuritiesUnderlyingUnexercisedUnearnedOptions(#)
OptionExercisePrice
ExpirationDate
GrantDate(1)
Numberof
SharesorUnitsofStockthat
havenotVested
MarketValueofSharesorUnitsofStockthathavenotVested(2)
EquityIncentivePlan
Awards:NumberofUnearnedShares,UnitsofStockorOtherRights
thathavenot
Vested(3)
EquityIncentivePlan
AwardsMarketorPayoutValueofUnearnedShares,Unitsor
OtherRightsthathavenotVested
RichardE.Muncrief 5/15/2014 121,167 $ 21.45 3/3/2024 3/1/2019 236,593 $ 3,250,788 354,889 $ 4,876,175 3/2/2018 125,000 1,717,500 281,250 3,864,375 3/3/2017 58,013 797,099 261,058 3,586,937
J.KevinVann 3/1/2019 93,158 1,279,991 93,158 1,279,991 3/2/2018 53,267 731,889 79,900 1,097,826 3/3/2017 24,172 332,123 72,516 996,370 7/29/2014 23,790 21.81 7/29/2024 3/3/2014 6,476 17.47 3/3/2024 3/4/2013 7,812 14.41 3/4/2023 2/29/2012 5,857 18.16 2/28/2022 2/24/2011 3,560 16.46 2/24/2021 2/23/2010 4,131 11.75 2/23/2020
ClayM.Gaspar 3/1/2019 104,100 1,430,334 156,151 2,145,515 3/2/2018 56,818 780,679 127,840 1,756,522 3/3/2017 30,215 415,154 90,645 1,245,462
BryanK.Guderian 3/1/2019 69,006 948,142 69,006 948,142 3/2/2018 41,430 569,248 62,144 853,359 3/3/2017 18,129 249,092 54,387 747,277 3/3/2014 29,678 17.47 3/3/2024 3/4/2013 31,328 14.41 3/4/2023 2/29/2012 24,900 18.16 2/28/2022 2/24/2011 19,230 16.46 2/24/2021 2/23/2010 23,951 11.75 2/23/2020
DennisC.Cameron 3/1/2019 55,205 758,517 55,205 758,517 3/2/2018 23,674 325,281 35,511 487,921 3/3/2017 12,086 166,062 36,258 498,185 3/3/2014 18,548 17.47 3/3/2024 3/4/2013 7,812 14.41 3/4/2023 2/29/2012 8,891 18.16 2/28/2022
StockAwards
(1) Thefollowingtablereflectsthevestingdatesforassociatedtime-basedRSAgrantdates.
Grant DateVestingSchedule VestingDates3/1/2019 One-thirdoftime-basedawardsvestannually 3/2/2020,3/2/2021,3/2/20223/2/2018 One-thirdoftime-basedawardsvestannually 3/1/2019,3/2/2020,3/2/20213/3/2017 One-thirdoftime-basedawardsvestannually 3/2/2018,3/1/2019,3/2/2020
(2) ValuesarebasedonclosingstockpriceforWPXEnergyof$13.74onDecember31,2019.
(3) Allperformance-basedRSUsaresubjecttoattainmentofperformancetargetsestablishedbytheCommittee.TheannualgrantpayoutisbasedonWPX'sTSRrelativetoitspeergroupoverthethree-yearperformanceperiod.Allawardswillvestnoearlierthanthreeyearsfromthegrantdate.TheawardsincludedinthetableareoutstandingasofDecember31,2019,andfortheMarch1,2020(preliminaryestimatedperformanceattainmentof100%),March2,2019(preliminaryestimatedperformanceattainmentof100%)andMarch2,2018(preliminaryestimatedperformanceattainmentof100%).
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2019GrantsofPlan-BasedAwards
ThefollowingtablesetsforthcertaininformationwithrespecttoawardspayableunderWPX'sannualcashincentiveprogramandRSUandRSAswithrespecttoWPXstockawardsmadeduringthefiscalyear2019totheNEOs.
2019WPXOptionExercisesandStockVested
ThefollowingtablesetsforthcertaininformationwithrespecttooptionstoacquirethestockofWPXexercisedbytheNEOsandstockthatvestedduringthefiscalyear2019totheNEOs.
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AllOtherStock
Awards:NumberofSharesofStockorUnits(3)
AllOtherOptionAwards
NumberofSecuritiesUnderlyingOptions
EstimatedFuturePayoutsUnderNon-EquityIncentive
PlanAwards(1)
EstimatedFuturePayoutsUnderIncentivePlan
Awards(2)
ExerciseorBasePriceofOptionAwards
GrantdateFairValueofStock
andOptionAwards(4)
GrantDate
Executive Threshold Target Maximum Threshold Target Maximum RichardE.Muncrief 3/1/2019 $ 570,000 $ 1,140,000 $ 2,280,000 177,445 354,889 709,778 $ 5,280,748
236,593 2,966,876J.KevinVann 3/1/2019 234,000 468,000 936,000 46,579 93,158 186,316 1,386,191
93,158 1,168,201ClayM.Gaspar 3/1/2019 287,500 575,000 1,150,000 78,076 156,151 312,302 2,323,527
104,100 1,305,414BryanK.Guderian 3/1/2019 180,000 360,000 720,000 34,503 69,006 138,012 1,026,809
69,006 865,335DennisC.Cameron 3/1/2019 160,000 320,000 640,000 27,603 55,205 110,410 821,450
55,205 692,271
(1) Non-equityIncentivePlanAwardsarefromWPX's2019AIP.Atthreshold,the2019AIPawardswouldbe50%oftarget.Thetargetamountisbaseduponattaining100%oftargetperformancegoalsforallsixperformancemetrics.ThemaximumamounttheNEOscanreceiveis200%oftheirAIPtarget.ThesetargetsreflecttheNEOssalaryasofFebruary16,2019,andtheapprovedincentivetargets.TheactualAIPawardiscalculatedbasedoneligibleearningsduringtheyearoftheaward.
(2) Representsperformance-basedRSUsgrantedunderWPX's2013IncentivePlan.Performance-basedRSUscanbeearnedoverathree-yearperiodonlyiftheestablishedperformancetargetismetandtheNEOisemployedonthevestingdate,subjecttocertainexceptionssuchastheexecutive'sdeathordisability.Theseshareswillbedistributednoearlierthanthethirdanniversaryofthegrantotherthanduetoaterminationuponachangein-control.Ifperformanceplangoalsareexceeded,theNEOcanreceiveupto200%oftarget.Ifplanthresholdgoalsarenotmet,theNEO'sawardsarecancelledintheirentirety.
(3) Representstime-basedRSAsgrantedunderWPX's2013IncentivePlan.One-thirdoftime-basedawardsvestannuallyon3/2/2020,3/2/2021,and3/2/2022.
(4) AmountsreflectagrantdatefairvaluederivedfromaMonteCarlopricingmodel,consistentwithASC718.
OptionAwards StockAwards
Executive
NumberofShares
AcquiredonExercise
ValueRealizedonExercise
NumberofShares
AcquiredonVesting
ValueRealizedonVesting
RichardE.Muncrief — — 920,513 $ 11,553,233J.KevinVann 2,019 $ 13,770 273,026 3,428,007ClayM.Gaspar — — 336,402 4,223,027BryanK.Guderian 11,710 79,862 149,953 1,883,725DennisC.Cameron — — 107,256 1,346,884
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2019NonqualifiedDeferredCompensation
Thefollowingtablesetsforthcertaininformationwithrespecttononqualifieddeferredcompensationduringthefiscalyear2019totheNEOs.
See"ElementsofourCompensationProgram—Benefits and Limited Perquisites"foradiscussionofcompensationthatmaybedeferred.Distributionsareavailablenosoonerthansixmonthsafterseparationfromservice,withchoicesoflumpsumoruptotenannualinstallments.Scheduledin-servicedistributionsarealsoavailable.
Change-in-ControlAgreements
WPXhasenteredintochange-in-controlagreementswithcertainofficers,includingeachofourNEOs.Theprovisionsofouragreementsaredescribedbelow.Thedefinitionsofwordsinquotationsarealsoprovidedbelow.
Ifa"change-in-control"occursandwithintwoyearsfollowingsuchchange-in-control(i)theemploymentofanyNEOisterminatedotherthanfor"cause,""disability,"death,ora"disqualificationdisaggregation,"or(ii)anNEOresignsfor"goodreason,"suchNEOisentitledtothefollowing:
• Accruedbutunpaidbasesalary,accruedearnedbutunpaidcashincentive,accruedbutunpaidpaidtimeoff,andanyotheramountsorbenefitsduebutnotpaid(lumpsumpayment);
• Proratedannualbonuspaidattargetfortheyearofseparationthroughtheterminationdate(lumpsumpayment);
• Aseveranceamountcomprisedofeither(a)threetimesinthecaseofourCEO,or(b)twotimesinthecaseofourotherNEOsthesumoftheexecutive'sbasesalaryplusanannualbonusamountequaltohis/heraverageactualAIPpaymentoverthepastthreeyears,assumingtheincumbenthasbeeninacomparablerole/levelinthecompanyduringthatperiod.(Iftheincumbenthasbeeninacomparablerole/levelforonlytwoyears,thentheaverageactualAIPpaymentwouldbecalculatedusingtheaverageofthosetwoyears.Similarly,iftheincumbenthasbeeninasimilarrole/levelforonlyoneyear,thentheaverageactualAIPpaymentwouldbeactualAIPearnedforthatoneyear.Iftheincumbenthasnotoccupiedanexecutiveemploymentclassification,averageactualAIPpaymentwouldbecalculatedusing75%oftheexecutive'sbasesalary);
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Executive
ExecutiveContributionsinLastFY
RegistrantContributionsinLastFY(1)
AggregrateEarningsinLast
FY(2)
AggregateWithdrawals/Distributions
AggregateBalance
atLastFYE RichardE.Muncrief $ 312,398 $ 274,025 $ 649,390 0 $ 3,789,404J.KevinVann 0 64,672 28,844 0 388,109ClayM.Gaspar 72,879 133,052 198,776 0 1,107,632BryanK.Guderian 0 59,330 52,962 0 462,730DennisC.Cameron 44,976 67,943 36,907 0 490,582
(1) IncludedintheSummaryCompensationTableundercolumnlabeledAllOtherCompensation.TherearenoncontributoryandmatchingcontributionsmadebytheCompanytoitsnonqualifiedplansonbehalfofeachNEOlistedinthetable.
(2) Adiversearrayofinvestmentcreditingoptionsisavailabletoparticipantsthatfollowactualmarketinvestments.Themenuissuitedtovariablelevelsofrisktoleranceandpreferredassetclasses.Choicesmaybemadeasoftenasdaily.
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• ContinuedeligibilitytoelectcoverageunderCOBRAforsolongastheNEOelectscoverageor18monthsfromthetermination,whicheverisless,plusalumpsumcashpaymentequaltothecostofthecontinuedCOBRAmedicalcoveragefor18months;
• AllrestrictionsonstockoptionsheldbytheNEOwilllapse,andtheoptionswillvestandbecomeimmediatelyexercisable.Optionsareexercisableuntiltheearlierof18monthsfromtheeventdateortheoriginalexpirationdate;
• Allrestrictedstockwillvestandwillbepaidoutonlyinaccordancewiththetermsoftherespectiveawardagreements;
• Continuedparticipationinthedirectors'andofficers'liabilityinsuranceforsixyearsoranylongerknownapplicablestatuteoflimitationsperiod;
• IndemnificationassetforthundertheCompany'sbylaws;and
• Outplacementbenefitsatacostnotexceeding$25,000.
Ouragreementsprovidea"bestnet"provisionprovidingtheNEOswiththebetteroftheirafter-taxbenefitcappedatthesafeharboramountortheirbenefitpaidinfullsubjectingthemtopossibleexcisetaxpayments.
IfanNEO'semploymentisterminatedfor"cause"duringtheperiodbeginninguponachange-in-controlandcontinuingfortwoyears,theNEOisentitledtoaccruedbutunpaidbasesalary,accruedearnedbutunpaidcashincentive,accruedbutunpaidpaidtimeoff,andanyotheramountsorbenefitsduebutnotpaid(lumpsumpayment).
OuragreementswithourNEOsusethefollowingdefinitions:
"Cause"meansanNEO's:
• Convictionoforpleaofnolocontenderetoafelonyoracrimeinvolvingfraud,dishonestyormoralturpitude;
• Willfulorrecklessmaterialmisconductintheperformanceofhis/herdutiesthathasanadverseeffectontheCompanyoranyofitssubsidiariesoraffiliates;
• WillfulorrecklessviolationordisregardoftheCodeofBusinessConductoftheCompanyorthepoliciesoftheCompany;or
• Habitualorgrossneglectofduties.
Causegenerallydoesnotincludebadjudgmentornegligence(otherthanhabitualneglectorgrossnegligence);actsoromissionsmadeingoodfaithafterreasonableinvestigationbytheNEO;oractsoromissionswithrespecttowhichtheBoardofDirectorscoulddeterminethattheNEOhadsatisfiedthestandardsofconductforindemnificationorreimbursementunderourbylaws,indemnificationagreement,orapplicablelaw;orfailure(despitegoodfaithefforts)tomeetperformancegoals,objectives,ormeasuresforaperiodbeginninguponachange-in-controlandcontinuingfortwoyears.AnNEO'sactorfailuretoact(exceptasrelatestoaconvictionorpleaofnolocontenderedescribedabove),whendoneingoodfaithandwithareasonablebeliefafterreasonableinvestigationthatsuchactionornon-actionwasinthebestinterestoftheCompanyoritsaffiliateorrequiredbylawshallnotconstitutecauseiftheNEOcurestheactionornon-actionwithintenbusinessdaysofnotice.Furthermore,noactorfailuretoactwillbecauseiftheNEOactedundertheadviceoftheCompany'scounselorasrequiredbythelegalprocess.
"Change-in-control"means:
• Anypersonorgroup(otherthananaffiliateoftheCompanyoranemployeebenefitplansponsoredbytheCompanyoritsaffiliates)becomesabeneficialowner,assuchtermisdefined
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undertheExchangeAct,of25%ormoreofthecommonstockoftheCompanyor25%ormoreofthecombinedvotingpowerofallsecuritiesentitledtovotegenerallyintheelectionofdirectorsoftheCompany("VotingSecurities");
• TheCompany'sdirectorsasofadateoftheagreement(the"WPXIncumbentDirectors")anddirectorsapprovedafterthatdatebyatleasttwo-thirdsoftheWPXIncumbentDirectorsceasetoconstituteamajorityofthedirectorsoftheCompany;
• Consummationofanymerger,reorganization,recapitalization,consolidationorsimilartransaction("ReorganizationTransaction"),otherthanaReorganizationTransactionthatresultsinthepersonswhowerethedirectorindirectownersofoutstandingcommonstockandVotingSecuritiesoftheCompanypriortothetransactionbecoming,immediatelyafterthetransaction,theownerofatleast65%ofthethen-outstandingcommonstockandVotingSecuritiesrepresentingatleast65%ofthecombinedvotingpowerofthethen-outstandingVotingSecuritiesofthesurvivingcorporationinsubstantiallythesamerespectiveproportionsassuchpersons'ownershipimmediatelybeforesuchReorganizationTransaction;or
• ApprovalbythestockholdersoftheCompanyofthesaleorotherdispositionofallorsubstantiallyalloftheconsolidatedassetsoftheCompanyorthecompleteliquidationoftheCompanyotherthanatransactionthatwouldresultin(i)arelatedpartyowningmorethan50%oftheassetsthatwereownedbytheCompanyimmediatelypriortothetransactionor(ii)thepersonswhowerethedirectorindirectownersofoutstandingcommonstockoftheCompanyandVotingSecuritiespriortothetransactioncontinuingtoown,directlyorindirectly,50%ormoreoftheassetsthatwereownedbytheCompanyimmediatelypriortothetransaction.Achange-in-controlwillnotoccuriftheNEOagreesinwritingpriortoaneventthatsuchaneventwillnotbeachange-in-control.
"Disability"meansaphysicalormentalinfirmitythatimpairstheNEO'sabilitytosubstantiallyperformhis/herdutiesfor12monthsormoreorforwhichhe/sheisreceivingincomereplacementbenefitsfromaCompanyplanfornotlessthanthreemonthsbecauseofanimpairmentthatisexpectedtolastfornotlessthan12months.
"Disqualificationdisaggregation"means:
• TheterminationofanNEO'semploymentfromtheCompanyoranaffiliatebeforeachange-in-controlforanyreason;or
• TheterminationofanNEO'semploymentbyasuccessor(duringtheperiodbeginninguponachange-in-controlandcontinuingfortwoyears),iftheNEOisemployedinsubstantiallythesamepositionandthesuccessorhasassumedtheCompany'schange-in-controlagreement.
"Goodreason"means,generally,amaterialadversechangeintheNEO'stitle,positionorresponsibilities,areductionintheNEO'sbasesalary,amaterialreductionintheNEO'sannualbonus,requiredrelocation,amaterialreductioninthelevelofaggregatecompensationorbenefitsnotapplicabletotheNEO'speers,asuccessorcompany'sfailuretohonortheagreementorthefailureoftheCompany'sBoardofDirectorstoterminateanemployeewithin90daysofprovidingsuchemployeeofwrittennoticeofanactoromissionconstituting"cause."
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TerminationScenarios(6)
CompensationCommitteeReport
TheCommitteehasreviewedanddiscussedwithmanagementthesectionaboveentitled"CompensationDiscussionandAnalysis."Basedonthisreviewanddiscussion,theCommitteerecommendedtotheBoardthattheCompensationDiscussionandAnalysisbeincludedinthe2020ProxyStatement.
Robert Herdman
Henry E. Lentz, Chairman
Kimberly S. Lubel
55
Executive Payment ForCause(1) Retirement(2)
Deathand
Disability(3)
Notfor
Cause(4) CIC(5) RichardE.Muncrief StockOptions 0 0 0 0 0
StockAwards 0 6,761,288 12,526,674 12,526,674 18,092,873 CashSeverance 0 0 0 4,508,137 6,762,205 AnnualIncentive 1,130,770 1,130,770 1,130,770 1,130,770 Outplacement 0 0 0 25,000 25,000 Health&Wellness 0 0 0 17,345 26,018 Total 0 $ 7,892,058 $ 13,657,444 $ 18,207,926 $ 26,036,866
J.KevinVann StockOptions 0 NA 0 0 0 StockAwards 0 NA 4,217,738 4,217,738 5,718,190 CashSeverance 0 NA 0 1,559,933 2,079,910 AnnualIncentive NA 465,231 465,231 465,231 Outplacement 0 NA 0 25,000 25,000 Health&Wellness 0 NA 0 24,790 37,185 Total 0 NA $ 4,682,969 $ 6,292,692 $ 8,325,516
ClayMGaspar StockOptions 0 NA NA NA NA StockAwards 0 NA 5,328,857 5,328,857 7,773,666 CashSeverance 0 NA 0 1,756,530 2,342,040 AnnualIncentive 0 NA 571,154 571,154 571,154 Outplacement 0 NA 0 25,000 25,000 Health&Wellness 0 NA 0 24,790 37,185 Total 0 NA $ 5,900,011 $ 7,706,331 $ 10,749,045
BryanK.Guderian StockOptions 0 0 0 0 0 StockAwards 0 1,420,124 3,186,607 3,186,607 4,315,761 CashSeverance 0 0 0 1,307,639 1,743,519 AnnualIncentive 0 358,366 358,366 358,366 358,366 Outplacement 0 0 0 25,000 25,000 Health&Wellness 0 0 0 24,790 37,185 Total 0 $ 1,778,490 $ 3,544,973 $ 4,902,402 $ 6,479,831
DennisC.Cameron StockOptions 0 0 0 0 0 StockAwards 0 930,919 2,180,778 2,180,778 2,994,482 CashSeverance 0 0 0 1,123,021 1,497,361 AnnualIncentive 0 319,746 319,746 319,746 319,746 Outplacement 0 0 0 25,000 25,000 Health&Wellness 0 0 0 17,345 26,018 Total 0 $ 1,250,665 $ 2,500,524 $ 3,665,890 $ 4,862,607
(1) ForCause:ForanNEOwhoisterminatedforcause,allunvestedstockoptionsandstockawardscancel.
(2) Retirement:IfanNEOretiresfromWPX,apro-ratedportionofanyperformance-basedRSUswillvestontheoriginalvestingdateiftheCommitteecertifiesthattheperformancegoalsweremet.
(3) Death&Disability:IfanNEOdiesorbecomesdisabled,thenallunvestedstockoptionswillfullyaccelerate.Allunvestedtime-basedRSAswillfullyaccelerateandapro-ratedportionofanyperformance-basedRSUswillvestontheoriginalvestingdateiftheCommitteecertifiesthattheperformancegoalsweremet.
(4) NotforCause:ForanNEOwhoisinvoluntarilyterminatedandreceivesseveranceorforanNEOwhosejobisoutsourcedwithnocomparableinternaloffer,allunvestedtime-basedRSAswillfullyaccelerateandapro-ratedportionofanyperformance-basedRSUswillvestontheoriginalvestingdateiftheCommitteecertifiesthattheperformancegoalsweremet.However,unlessanNEOisretirementeligible,allunvestedstockoptionswillcancel.Undertheindividualstockoptionagreements,ifanNEOisretirementeligible,thenallunvestedstockoptionswillfullyaccelerate.
(5) CIC:see"Change-in-ControlAgreements"sectionabove.
(6) EligibilitytoparticipateinourexecutiveseveranceplayplanisdeterminedbytheCommitteeinthecaseofanexecutiveofficer.TheBoardofDirectorsmakesdeterminationsofwhetheranemployeehasbeenterminatedforcauseunderourchange-in-controlagreements.
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DirectorCompensation
TheCommitteeisresponsibleforreviewingthecompensationfornon-employeedirectorsannuallyandrecommendinganychangestotheBoardofDirectors.TheobjectiveofthisannualreviewistodeterminewhetherourdirectorcompensationisappropriateinrelationtoothercomparableU.S.companiesandiscompetitivetoattractandretainthemostqualifiedmembersfortheBoardofDirectors.
Ournon-employeedirectorsreceivecompensationintheformofbothcashandequity,withamuchgreaterproportionofthetotalcompensationdeliveredintheformofrestrictedstockthanincash.Thisrestrictedstockvestsoneyearafterthedateofgrant.Theweightingtowardequityhelpstoaligntheinterestsofourdirectorswithourstockholders.
Tofurtheraligntheinterestsofourdirectorswiththelong-terminterestsofourstockholders,ourstockownershipguidelinesrequireeachdirectortoholdcommonstockofWPXequaltoatleastfivetimestheannualcashretainerpaidtodirectors.Undertheguidelines,sharesownedoutright,restrictedstockawards,andequitydeferredunderournonqualifieddeferredcompensationplanarecountedasowned.If,ontheannualcompliancedateofFebruary1ofeachyear,adirectordoesnotownsharesequaltofivetimestheannualcashretainer,thatdirectorisrequiredtoretain50%ofanyWPXequityacquiredthroughthevestingofrestrictedstock,netoftaxes,untilthenextFebruary1compliancedatewhenhisorherWPXstockownershipmeetstherequiredmultipleofpay.Currentlythreedirectors—ValerieWilliams(electedtotheBoardofDirectorsinMarch2018),D.MartinPhillipsWilliams(electedtotheBoardofDirectorsMarch6,2020)andDouglasE.Swanson,Jr.Williams(electedtotheBoardofDirectorsonMarch6,2020)—donotholdtheamountofstockrequiredbyourstockownershipguidelines.
Underournonqualifieddeferredcompensationplan,non-employeedirectorsmaydeferupto100%oftheirannualcashretainerand/or100%oftheirannualequitygrant.AnycashorequitydeferredispaidwhenthedirectorleavestheBoardofDirectors.
Thefollowingtablesummarizesourdirectorcompensationprogramfor2019andprovidesabreakdownofdirectorcompensationintheformofcashversusequity.
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DollarValue
PercentageofRetainer
BoardMembers AnnualCashRetainer $ 75,000 28%AnnualEquityRetainer—RestrictedStock 195,000 72%TotalAnnualRetainer 270,000
CommitteeChairs CompensationCommittee&Nominating,Governance,EnvironmentalandPublicPolicyCommittee 15,000 AuditCommittee 20,000
LeadDirector AdditionalAnnualCashRetainer 30,000
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DirectorCompensationTable
ThefollowingtablesetsforthcertaininformationwithrespecttothecompensationoftheBoardofDirectorsearnedduringfiscalyear2019.
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Director
FeesEarnedorPaidinCash
StockAwards(3)(4)
OptionAwards
Non-EquityIncentivePlanCompensation
ChangeinPensionValue
andNonqualifiedDeferred
CompensationEarnings
AllOtherCompensation(5) Total
JohnA.Carrig $ 0 $ 0 $ 0 $ 0 $ 0 $ 290,000 $ 290,000RobertK.Herdman 75,000 0 0 0 0 196,860 271,860KeltKindick 120,000 195,000 0 0 0 0 315,000KarlF.Kurz 0 0 0 0 0 270,000 270,000HenryE.Lentz 90,000 195,000 0 0 0 0 285,000KimberlyS.Lubel 75,000 195,000 0 0 0 0 270,000ValerieWilliams 75,000 0 0 0 0 195,000 270,000DavidF.Work 75,000 0 0 0 0 196,298 271,298WilliamG.Lowrie(1) 31,250(2) 0 0 0 0 1,613 32,863
(1) Mr.LowrieretiredfromtheBoardofDirectorsatthe2019AnnualMeetingheldonMay16,2019.
(2) Representsaproratedretainerforserviceduring2019priortoretiringfromtheBoardofDirectors.
(3) Representsthegrantdatefairvalueofthe2019stockawardsbasedona$13.00persharegrant-datestockprice.
Director GrantDate
NumberofSharesGranted
GrantDateFairValue
JohnA.Carrig 5/16/2019 15,000 $ 195,000RobertK.Herdman 5/16/2019 15,000 195,000KeltKindick 5/16/2019 15,000 195,000KarlF.Kurz 5/16/2019 15,000 195,000HenryE.Lentz 5/16/2019 15,000 195,000KimberlyS.Lubel 5/16/2019 15,000 195,000ValerieWilliams 5/16/2019 15,000 195,000DavidF.Work 5/16/2019 15,000 195,000
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CEOPayRatio
AsrequiredbytheDodd-FrankWallStreetReformandConsumerProtectionActandRegulationS-K,weareprovidingthefollowinginformationabouttherelationshipoftheannualtotalcompensationofourmedianemployeetotheannualtotalcompensationofourCEO.
ThepayratiocalculatedbytheCompanyisareasonableestimatedeterminedinaccordancewithSECrulesandmethodsfordisclosure.Duetoestimates,assumptions,adjustments,andstatisticalsamplingpermittedundertherules,payratiodisclosuresmayinvolveadegreeofimprecisionandmaynotbeconsistentwiththemethodologiesincorporatedbyothercompanies.
CEOPayRatioMethodology
For2019,were-evaluatedourmedianemployeeduetothepreviousmedianemployeeexitingthecompanyandcalculatedtheratiopursuanttothemethodologydescribedbelow,asofOctober31,2019.Toidentifythemedianofthetotalannualcompensationofallouremployees,wetookthefollowingsteps:
• WeutilizedadeterminationdateofOctober31,2019,toenableustoidentifythemedianemployeeinareasonablyefficientandeconomicalmanner;
• Ouremployeepopulationconsistedof620outof620employees,includingfull-time,part-time,andtemporaryemployees;
• Weutilizednocostoflivingadjustmentsinthecompensationcalculation;
• Toidentifythemedianemployee,weusedannualizedbasesalaryastheconsistentlyappliedcompensationmeasure;and
• Onceweidentifiedthemedianemployee,wecalculatedthatemployee'stotalcompensationusingthesamemethodologyasrequiredforthesummarycompensationtabledisclosed
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(4) Thenon-employeedirectorshavethefollowingstockandoptionawardsoutstandingasofDecember31,2019.
Director
NumberofOutstandingOptionAwards
NumberofOutstandingStockAwards
JohnA.Carrig 91,848RobertK.Herdman 91,848KeltKindick 15,000KarlF.Kurz 31,009HenryE.Lentz 15,000KimberlyS.Lubel 15,000ValerieWilliams 26,368DavidF.Work 73,703
(5) Theamountsdisclosedinthe"AllOtherCompensation"columnrelatetodeferredFeesEarnedorPaidinCashanddeferredStockAwards(atgrantdatevalue)and,inthreeinstances,thepersonaluseoftheCompanyaircraft.
Year
Mr.Muncrief'sTotal
Compensation
MedianEmployeeTotal
Compensation
PayRatioofCEO
CompensationtoMedianEmployee
2019 $ 11,334,302 $ 155,484 73:1
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elsewhereinthisProxyStatement.WecalculatedMr.Muncrief'stotalcompensationusingthesamesummarycompensationtablemethodology.
Webelievetheforegoingpayratiodisclosure,includingbutnotlimitedtoanyassumptions,estimates,adjustments,methodologiesandexistinginternalrecordsusedtoidentifyourmedianemployee,isareasonableestimatecalculatedinamannerconsistentwithSECItem402(u)ofRegulationS-K.TheSECrulesforidentifyingthemedianemployeeandcalculatingthatemployee'sannualtotalcompensationallowcompaniestomakereasonableassumptionsandestimates,andtoapplyavarietyofmethodologiesandexclusionsthatreflecttheircompensationpractices.Asaresult,thepayratioreportedbyothercompaniesmaynotbecomparabletothepayratioreportedabove,asothercompaniesmayhavedifferentcompensationpractices,andmayutilizedifferentassumptions,estimates,methodologiesandexclusionsincalculatingtheirownpayratios.
EQUITYCOMPENSATIONPLANINFORMATION
ThefollowingtableprovidesinformationconcerningWPXcommonstockthatmaybeissuedupontheexerciseofoptions,warrantsandrightsundertheWPXEnergy,Inc.2013IncentivePlan,asamended,asofDecember31,2019.
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PlanCategory
NumberofSecurities
tobeIssueduponExerciseofOutstandingOptions,
WarrantsandRights
Weighted-AverageExercisePriceofOutstandingOptions,
Warrants,andRights(1)
NumberofSecuritiesRemainingAvailable
forFutureIssuanceUnderEquityCompensation
Plans(ExcludingSecurities
Reflectedinthe1stColumnofThisTable)
Equitycompensationplansapprovedbysecurityholders 696,928 $ 16.84 8,332,103
(1) Excludesthesharesissuableuponthevestingofrestrictedstockunitsandrestrictedstockawardsincludedinthefirstcolumnofthistableforwhichthereisnoweighted-averageexerciseprice.
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PROPOSAL2—ADVISORYVOTEONEXECUTIVECOMPENSATION
Atour2019annualmeetingofstockholders,ourstockholderselectedtohaveanadvisoryvoteonexecutivecompensationeveryyear.Weareaskingourstockholderstoprovideanadvisory,nonbindingvotetoapprovethecompensationawardedtoourNEOsfor2019.Thiscompensationisdescribedinthe"ExecutiveCompensation"sectionandincludestheExecutiveSummary,CompensationDiscussionandAnalysis,andthecompensationtablesandrelateddisclosures.
AsdiscussedintheCompensationDiscussionandAnalysis,ourexecutivecompensationprogramisdesignedtofocusourexecutiveofficersonourstrategyofgrowingprofitableproductionandreserveswhilekeepingourunitcostdown,generatingpositivecashflow,andmaintainingadequateliquiditytomeetbusinessobjectives.Weemployperformancemetricstiedtoourstrategysoweencourageperformancethatcreateslong-termvalueforourstockholders.TheCompensationCommitteeoverseesourexecutivecompensationprogramandmaintainsafocusonpayingourexecutiveofficersforperformance,notonlythroughtheuseofperformancemetricstiedtoourstrategybutalsobyusingamixofcompensationelementsthatemphasizespaythatvariesbasedonWPX'sperformance.
In2019,wereceivedafavorableadvisoryvotewithapproximately97percentoftheCompany'ssharesrepresentedandeligibletovoteattheannualstockholdersmeetingvotinginfavoroftheexecutivecompensationprogram.WehavemadenosignificantchangestothestructureoftheCompany'sexecutivecompensationprogramasaresultofthevote.
Highlightsofourexecutivecompensationprograminclude:
• Themajorityofcompensationpaidtoourexecutivesisequity-based;
• Weuseabalancedapproachtoperformancemetricstofocusexecutiveofficersonexecutingourstrategywhilediscouragingexcessiverisk-taking;
• Ourstockownershipguidelinesencourageourexecutiveofficerstohaveasignificantstakeinourlong-termsuccessandaligntheirinterestswithstockholderinterests;
• TheCompensationCommitteeregularlyreviewsshareutilization,overhanglevels,andtheannualrunrate;
• Ourrecoupmentpolicyrequiresrecoveryofallperformance-basedincentivepaymentsfromexecutiveofficersfoundtoberesponsibleforfraudorintentionalmisconductthatresultsinasignificantrestatementofourfinancialresultsaswellasrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults;
• Ourchange-in-controlagreementshavea"doubletrigger"forpayments,equityawards,andotherbenefitssotheyarenottriggeredsolelyonachange-in-control;
• WeprovideverylimitedperquisitestoourNEOs;
• TheCompensationCommitteeengagesanindependentcompensationconsultanttoprovidecompetitivemarketdataforourexecutiveofficersandtoleaddiscussionsontrendswithinourindustry;
• Whenmakingcompensationdecisions,theCompensationCommitteeusestallysheetstoconsidertotaloutstandingequityvalueandestimatesofamountsthatwouldbepaidinvariousterminationscenarios;
• Ourperformance-basedRSUprogramprohibitspayoutsinexcessof100%ifabsoluteTSRisnegative,regardlessoftherankingofourTSRrelativetopeers;
• Wedonotprovideemploymentcontractstoourexecutiveofficers;
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• Wedonotprovidegross-upstocoverpersonalincometaxesthatpertaintoexecutiveorseverancebenefitsorthelimitedperquisitesthatweoffer;
• Ourinsidertradingpolicyprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesbyourdirectorsandexecutiveofficers(anti-hedgingpolicy);
• Wedonotpermitourdirectorsorexecutiveofficerstoengageinmargintradingofourstockortouseoursecuritiesascollateralforaloan(anti-pledgingpolicy);and
• Ourincentiveplanprohibitstherepricingandbackdatingofstockoptionswithoutstockholderapproval.
Weareaskingourstockholderstoindicatetheirsupportforourexecutivecompensationprograms.WebelievetheinformationprovidedinthisProxyStatementdemonstratesourexecutivecompensationprogramisdesignedandoperatestoaligntheinterestsofourexecutiveofficerswiththeinterestsofourstockholderstocreatevalueoverthelong-term.
Whilethisvoteisadvisoryandnotbinding,wewillconsidertheoutcomeofthevote,alongwithotherrelevantfactors,whenmakingfutureexecutivecompensationdecisions.
Forthereasonssetforthabove,theBoardrecommendsthatyouvoteFORthefollowingresolution:
RESOLVEDthatthestockholdersapprove,onanadvisorybasis,thecompensationpaidtotheNEOs,asdisclosedinthisproxystatementpursuanttothecompensationdisclosurerulesoftheSecuritiesandExchangeCommission,includingtheCompensationDiscussionandAnalysis,thecompensationtables,andrelatednarrativediscussion.
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CERTAINRELATIONSHIPSANDTRANSACTIONS
AgreementsEnteredintoinConnectionwiththeAcquisitionofFelixEnergyHoldingsII,LLC
Securities Purchase Agreement
OnDecember15,2019,theCompanyandFelixHoldingsenteredintoaSecuritiesPurchaseAgreementpursuanttowhichtheCompanywouldpurchase,andFelixHoldingswouldsell,alloftheissuedandoutstandingmembershipinterestsofFelixEnergyHoldingsII,LLC(the"Membership Interests").FelixHoldingsisaffiliatedwithEnCapEnergyCapitalFundX,L.P.("EnCap"),anentityatwhichBoardmembersD.MartinPhillipsandDouglasE.Swanson,Jr.areprincipals.ThepurchasepricefortheMembershipInterestswas$2,500,000,000,consistingofcashequalto$900,000,000and152,963,671unregistered,fullypaid,validlyissuedandnonassessablesharesoftheCompany'scommonstock.ThetransactionscontemplatedbytheSecuritiesPurchaseAgreementclosedonMarch6,2020.
Stockholders Agreement
OnMarch6,2020,theclosingdateforthetransactionscontemplatedbytheSecuritiesPurchaseAgreement,theCompany,FelixHoldings,EnCapandcertainotherpartiesenteredintoaStockholdersAgreementpursuanttowhichFelixHoldingshastherighttonominateuptotwodirectorsforappointmenttotheBoard.FelixHoldings'righttonominatedirectorsissubjectto,amongotherthings,FelixHoldingsandcertainrelatedpartiescontinuingtoholdaminimumamountofsharesoftheCompany'soutstandingcommonstockandtheindividualnomineesbeingreasonablyacceptabletotheNGEPPCommitteeandnotprohibitedbylaw.UntilthedatewhenFelixHoldingsisnolongerentitledtodesignatedirectorstotheBoard,FelixHoldingswillcauseallvotingsecuritiesoftheCompanyheldbyitoritsrelatedpartiestobevotedinfavorofalldirectornomineesnominatedbytheNGEPPCommittee,againstanyothernominees,andagainsttheremovalofanydirector(otherthanadirectorithasdesignatedtotheBoard)unlesstheNGEPPCommitteerecommendsinfavorofsuchremoval.
Foraperiodofonehundredandeighty(180)daysfromtheMarch6,2020closingdate,theStockholdersAgreementprohibitsFelixHoldingsfromtransferringordisposingofanyeconomic,votingorotherrightsintwo-thirdsoftheCompany'scommonstockissuedtoFelixHoldingspursuanttotheSecuritiesPurchaseAgreement,otherthancertainpermittedtransfers.Theremainingone-thirdofthesharesoftheCompany'scommonstockissuedtoFelixHoldingswillnotbesubjecttotransferrestrictionsimposedbytheStockholdersAgreement.
EnCap,theindirectmajorityholderofFelixHoldings,hasagreedtocustomarystandstillrestrictionspursuanttowhich,amongotherthings,EnCapwillnotacquire,agreeorproposetooffertoacquire(includingthroughanyhedgingorothersimilartransaction)anysharesoftheCompany'scommonstockorsecuritiesthatareconvertibleorexchangeableinto(orexercisablefor)sharesoftheCompany'scommonstockforaperiodofthirty-six(36)monthsfollowingtheMarch6,2020closingdate,exceptforanytimeduringsuchthirty-six(36)monthperiodduringwhichFelixHoldingsanditsrelatedholderscollectivelybeneficiallyownlessthantenpercent(10%)oftheoutstandingsharesoftheCompany'scommonstock.
Registration Rights Agreement
OnMarch6,2020,theCompany,FelixHoldingsandcertainotherpersonsenteredintoaRegistrationRightsAgreementpursuanttowhich,amongotherthings,theCompanyisrequiredtofilewiththeSecuritiesandExchangeCommissionaregistrationstatementonFormS-3thatregistersforresalethesharesoftheCompany'scommonstockissuedtoFelixHoldingsinconnectionwiththetransactionscontemplatedbytheSecuritiesPurchaseAgreementand,subjecttocertainrestrictions,toconductunderwrittenofferingsupontherequestofcertainholdersofsuchcommonstock.The
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RegistrationRightsAgreementalsoprovidespiggybackregistrationrightstocertainholdersofsuchcommonstock.
ProceduresforReviewandApprovalofRelated-PartyTransactions
TheBoardhasadoptedpoliciesandprocedureswithrespecttorelated-persontransactionsaspartoftheAuditCommitteecharter.Anyproposedrelated-persontransactioninvolvingamemberoftheBoardortheChiefExecutiveOfficermustbereviewedandapprovedbythefullBoard.TheAuditCommitteereviewsproposedtransactionswithanyotherrelatedpersons,promoters,andcertaincontrolpersons.IfitisimpracticaltoconveneanAuditCommitteemeetingbeforearelated-persontransactionoccurs,thechairofthecommitteemayreviewthetransactionalone.
Nodirectormayparticipateinanyreview,considerationorapprovalofanyrelated-persontransactionwithrespecttowhichsuchdirectororanyofhisorherimmediatefamilymembersistherelatedperson.TheAuditCommitteeoritschair,ortheBoard,asthecasemaybe,ingoodfaith,mayapproveonlythoserelated-persontransactionsthatarein,ornotinconsistentwith,WPXEnergy'sbestinterestsandthebestinterestsofourstockholders.Inconductingareviewofwhetheratransactionis,orisnotinconsistentwith,thebestinterestofWPXEnergyanditsstockholders,theAuditCommitteeoritschair,ortheBoard,asthecasemaybe,willconsiderthebenefitsofthetransactiontotheCompany,theavailabilityofothersourcesforcomparableproductsorservices,thetermsofthetransaction,thetermsavailabletounrelatedthirdpartiesandtoemployeesgenerally,andthenatureoftherelationshipbetweentheCompanyandtherelatedparty,amongotherthings.
COMPENSATIONCOMMITTEEINTERLOCKSANDINSIDERPARTICIPATION
Forallorportionsoffiscal2019,Messrs.Lentz,HerdmanandWorkandMs.LubelservedontheCompensationCommittee.NoneoftheseindividualshasbeenanofficeroremployeeoftheCompanyoranyofitssubsidiariesatanytime.In2019,noneofourexecutiveofficersservedasamemberoftheboardofdirectorsorcompensationcommitteeofanyothercompanythathasoneormoreexecutiveofficersservingasamemberofourBoardorCompensationCommittee.
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AUDITCOMMITTEEREPORT
TheAuditCommitteeofourBoardofDirectorsiscomprisedofthreenon-employeedirectors.TheBoardofDirectorshasdeterminedthatallofthemembersoftheAuditCommitteeareindependentwithinthemeaningofthelistingstandardsoftheNYSE,therulesoftheSECandtheCompany'sCorporateGovernanceGuidelinesandarefinanciallyliterateasdefinedbytheNYSEandareauditcommitteefinancialexpertsasdefinedbytheSEC.TheAuditCommitteeoperatesunderawrittencharteradoptedbytheBoardofDirectors.Consistentwiththischarter,theAuditCommitteeassiststheBoardofDirectorswithitsoversightresponsibilitiesastheyrelateto:
• theintegrityoftheCompany'sfinancialstatements;
• theeffectivenessoftheCompany'sinternalcontrolsoverfinancialreporting;
• theCompany'scompliancewithlegalandregulatoryrequirements;
• theimplementationandeffectivenessoftheCompany'sethicsandcomplianceprogram;
• theindependentauditor'squalificationsandindependence;and
• theperformanceoftheCompany'sindependentauditorandinternalauditors.
TheAuditCommitteealsohasresponsibilityforpreparingthisreport,whichmustbeincludedinourproxystatement,andappointingandretainingtheCompany'sindependentauditor.Inordertomeettheresponsibilitiesassignedtoitunderitscharter,theAuditCommitteeperformsanumberoftasks,includingthefollowing:
• Advancereviewofallauditandlegallypermittednon-auditservicestobeprovidedbyourindependentauditor.Thistaskincludessoleapprovalauthorityforthefeesandtermsoftheauditor'sengagement.
• ReviewoftheCompany'sauditedfinancialstatementsandquarterlyfinancialstatements.Inconnectionwiththistask,theAuditCommitteefocusesonseveralfactors,includingtheindependentauditor'sjudgmentofthequalityoftheCompany'saccountingprinciples,theresultsofmanagement'sandtheindependentauditor'sproceduresrelatedtopotentialfraud,andmajorissuesregardingjudgmentsmadeinconnectionwiththepreparationoffinancialstatements.
• Atleastanannualevaluationoftheindependentauditor.TheAuditCommitteeestablishedaprocessforevaluatingtheindependentauditorthatincludesobtaininganannualassessmentfromtheCompany'smanagement.Thatassessmentincludesseveralfactorsrelatedtotheindependentauditor,includingqualificationsandexpertise,pastperformanceandappropriatenessoffees.TheAuditCommitteealsoconsidersthecommunicationandinteractionswiththeindependentauditoroverthecourseoftheyearandtheresultsofPCAOBinspections,andconductsareviewoftheindependentauditor'sinternalqualitycontrolprocedures.
• Atleastanannualevaluationoftheindependentauditor'sindependence.
• QuarterlyreviewsoftheCompany'searningspressreleasesaswellasreviewsofguidanceprovidedtoinvestors.
• PeriodicreviewsoftheadequacyandeffectivenessoftheCompany'saccountingandinternalcontrolpoliciesandprocedures.
• PeriodicreviewsoftheCompany'sprogramforassessingandmanagingrisks,includingstepsmanagementhastakentomonitorandcontrolexposurestosuchrisks.
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ManagementisresponsiblefortheCompany'sinternalcontrolsandthefinancialreportingprocess.TheCompany'sindependentregisteredpublicaccountingfirm,Ernst&YoungLLP,isresponsibleforperforminganindependentauditoftheCompany'sconsolidatedfinancialstatementsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates),expressinganopinionastotheconformityofthefinancialstatementswithgenerallyacceptedaccountingprinciples,andexpressinganopinionontheCompany'sinternalcontroloverfinancialreporting.TheAuditCommittee'sresponsibilityistomonitorandoverseetheseprocesses.TheAuditCommitteehasdiscussedandreviewed,withbothmanagementandErnst&YoungLLP,management'sannualreportontheCompany'sinternalcontroloverfinancialreportingandErnst&YoungLLP'sattestation.
ManagementrepresentedtotheAuditCommitteethattheCompany'sconsolidatedfinancialstatementswerepreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica,andtheAuditCommitteehasreviewedanddiscussedwithmanagementandtheindependentregisteredpublicaccountingfirminseparatesessionstheCompany'sconsolidatedfinancialstatementsfortheyearsendedDecember31,2019,December31,2018andDecember31,2017.
TheAuditCommitteediscussedwithErnst&YoungLLPallmattersrequiredtobediscussedbyAuditingStandardNo.1301(CommunicationswithAuditCommittees).TheCompany'sindependentregisteredpublicaccountingfirmalsoprovidedtotheAuditCommitteethewrittendisclosuresandtheletterrequiredbyapplicablerequirementsofthePublicCompanyAccountingOversightBoardregardingtheindependentregisteredpublicaccountingfirm'scommunicationswiththeAuditCommitteeconcerningindependence,andtheAuditCommitteediscussedwiththeindependentregisteredpublicaccountingfirmtheaccountingfirm'sindependence.Inconsideringtheindependenceoftheindependentregisteredpublicaccountingfirm,theAuditCommitteetookintoconsiderationwhethertheprovisionofnon-auditservicesiscompatiblewithmaintainingtheindependenceoftheindependentregisteredpublicaccountingfirm.
TheCommitteealsoconsidersotherfactors,includingthepolicythatErnst&YoungLLPfollowswithrespecttorotationofitskeyauditpersonnel,sothatthereisanewpartner-in-chargeatleasteveryfiveyears.TheCommitteeisinvolvedintheselectionofthepartner-in-chargebythetimerotationisrequired.Ernst&YoungLLPdevelopsalistofpotentialcandidatesandidentifiesoneofthecandidatesasrecommendedbythefirm.TherecommendedcandidatemeetswithmembersofmanagementandtheCommittee.Attributesevaluatedincludeclientandfunctionalexperience,technicalcompetence,communicationskills,criticalbehaviors,familiaritywithauditcommitteeprocessesandindependentcommunicationsandstaturewithinErnst&YoungLLP.Iftherecommendedcandidateisselected,theprocessiscomplete.Iftherecommendedcandidateisnotselected,theprocesscontinueswithadditionalcandidatemeetingsuntilanacceptablecandidateisidentified.TheCommitteecompletedthisprocessin2016,with2017beingthefirstyearofthenewpartner-in-charge'stenure.
BasedupontheAuditCommittee'sreviewofthefinancialstatements,management'sreportoninternalcontrolsoverfinancialreporting,independentdiscussionswithmanagementandErnst&YoungLLP,andtheAuditCommittee'sreviewoftherepresentationofmanagementandthereportoftheindependentregisteredpublicaccountingfirmtotheAuditCommittee,theAuditCommitteerecommendedtotheBoardofDirectorsthateachof(1)theauditedconsolidatedfinancialstatementsfortheyearsendedDecember31,2019,December31,2018andDecember31,2017,and(2)management'sreportoninternalcontrolsoverfinancialreportingbeincludedintheCompany'sAnnualReportonForm10-KforthefiscalyearendedDecember31,2019filedwiththeSEC.
MembersoftheAuditCommittee
John A. Carrig, Chairman Karl F. Kurz Valerie M. Williams
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INDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
DisclosureofFeesPaidtoIndependentRegisteredPublicAccountingFirm
ThefollowingtablepresentsfeesforprofessionalservicesrenderedbyErnst&YoungLLPfortheauditoffinancialstatementsandotherservicesin2017and2018.
In2019and2018,allofErnst&YoungLLP'sfeeswerepre-approvedbytheCompany'sAuditCommittee.
AuditCommittee'sConsiderationofIndependenceofIndependentRegisteredPublicAccountingFirm
TheAuditCommitteehasreviewedthenatureofnon-auditservicesprovidedbyErnst&YoungLLPandhasconcludedthattheseservicesarecompatiblewithmaintainingthefirm'sabilitytoserveasourindependentregisteredpublicaccountingfirm.
PolicyonAuditCommitteePre-ApprovalofAuditandNon-AuditServicesofIndependentAuditors
TheAuditCommitteehasestablishedapolicyregardingpre-approvalofallauditandnon-auditservicesprovidedbyErnst&YoungLLP.
Onanongoingbasis,ourmanagementpresentsspecificprojectsandcategoriesofservicetotheAuditCommitteetorequestadvanceapproval.TheAuditCommitteereviewsthoserequestsandadvisesmanagementiftheAuditCommitteeapprovestheengagementofErnst&YoungLLP.Onaperiodicbasis,ourmanagementreportstotheAuditCommitteeregardingtheactualspendingforsuchprojectsandservicescomparedtotheapprovedamounts.TheAuditCommitteemayalsodelegatetheauthoritytopre-approveauditandpermittednon-auditservices,excludingservicesrelatedtotheCompany'sinternalcontroloverfinancialreporting,toasubcommitteeofoneormorecommitteemembers,providedthatanysuchpre-approvalsarereportedatasubsequentAuditCommitteemeeting.
TheAuditCommittee'spre-approvalpolicywithrespecttoauditandnon-auditservicesisanattachmenttotheAuditCommitteeCharter,whichisavailableonourwebsiteatwww.wpxenergy.comunder"Investors"and"CorporateGovernance."
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(inmillions) 2019 2018 AuditFees(1) $ 2.3 $ 2.3TaxFees(2) $ 0.4 $ 0.2AllOtherFees $ — $ —Total $ 2.7 $ 2.5
(1) Theaggregateauditfeesin2019and2018billedbyErnst&YoungLLPwereforfeesassociatedwiththeauditoftheCompany'sconsolidatedfinancialstatements,theauditofitsinternalcontroloverfinancialreporting,thereviewofitsquarterlyfinancialstatements,andservicesthatarenormallyprovidedinconnectionwithstatutoryandregulatoryfilings,includingconsultingservicesandservicesinconnectionwiththeCompany'sfilingsundertheSecuritiesActof1933,asamended.
(2) TheaggregatefeesbilledbyErnst&YoungLLPfortaxserviceswererelatedprimarilytotaxplanning,taxadvice,andtaxcompliance.
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PROPOSAL3—RATIFICATIONOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
TheAuditCommitteehasappointedErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2020.TheBoardhasproposedthatstockholdersratifythisappointmentattheAnnualMeeting.IfstockholdersdonotratifytheappointmentofErnst&YoungLLP,theAuditCommitteewillreconsidertheappointmentbutisnotobligatedtoappointanotherindependentregisteredpublicaccountingfirm.
InselectingErnst&YoungLLPasourindependentpublicaccountingfirmfor2020,theAuditCommitteeconsideredanumberoffactors,including:
• Ernst&YoungLLP'sinternalquality-controlprocedures,includingresultsofthemostrecentPublicCompanyAccountingOversightBoard(PCAOB)inspectionreportonErnst&YoungLLPandtheresultsofpeerreviewexaminations;
• ConsiderationofinvestigationsbygovernmentalorprofessionalauthoritiesandwhethertheymayimpairErnst&YoungLLP'sabilitytoperformourannualaudit;
• Ernst&YoungLLP'sindependenceprogramandanyrelationshipsbetweenErnst&YoungLLPandourcompanythatcouldhaveabearingonErnst&YoungLLP'sindependence;
• Ernst&YoungLLP'sindustryexperiencetoauditouroperations;
• Theprofessionalqualificationsoftheleadauditpartnerandotherkeyengagementpersonnel;
• Theperiodicrefreshmentofperspectiveandobjectivityprovidedbythemandatoryfive-yearrotationofthepartner-in-charge;
• Theengagementteam'scollectiveexpertiseandknowledgeofourbusiness,operationsandriskprofile;and
• TheresultsoftheevaluationofErnst&YoungLLP'sperformancedescribedintheAuditCommitteeReport.
RepresentativesofErnst&YoungLLPareexpectedtobepresentattheAnnualMeeting,willhaveanopportunitytomakeastatementiftheysodesireandwillbeavailabletorespondtoquestionsfromstockholders.
TheBoardrecommendsavoteFORratificationoftheselectionofErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2020.ProxieswillbevotedFORratifyingthisselectionunlessyouspecifyotherwise.
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SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT
ThefollowingtablesetsforthcertaininformationasofMarch11,2020,withrespecttothenumberofsharesofcommonstockownedby(a)eachdirectorandnomineefordirectoroftheCompany,(b)eachnamedexecutiveofficeroftheCompany,(c)alldirectorsandexecutiveofficersandnomineesasagroupand(d)eachstockholderknownbytheCompanytoownbeneficiallymorethanfivepercentofaclassoftheoutstandingcommonstock.Unlessotherwisenoted,eachpersonandgroupidentifiedpossessessolevotingandinvestmentpowerwithrespecttothesharesshownoppositesuchperson'sorgroup'sname.
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NameofIndividualorGroup
SharesofCommonStockOwnedDirectly
orIndirectly(1)(2)
OptionsExercisable
Within60DaysofMarch11,
2020(3) Total(1)(2)(3) PercentofClass(4)
JohnA.Carrig 159,655 0 159,655(5) *RobertK.Herdman 109,655 0 109,655 *KeltKindick 144,979(6) 0 144,979(6) *KarlF.Kurz 95,376 0 95,376 *HenryE.Lentz 119,655 0 119,655 *KimberlyS.Lubel 119,605 0 119,605 *D.MartinPhillips 0 0 0(7) *DouglasE.Swanson,Jr. 0 0 0(7) *ValerieWilliams 27,068 0 27,068 *DavidF.Work 111,655 0 111,655 *DennisC.Cameron 532,516 35,251 567,767(8) *ClayM.Gaspar 1,519,609 0 1,519,609 *BryanK.Guderian 731,759 105,136 836,895 *RichardE.Muncrief 2,567,516 121,167 2,688,683 *J.KevinVann 994,210 47,495 1,041,705 *Alldirectorsnomineesandexecutiveofficersasagroup(15individuals) 7,233,258 309,049 7,542,307 1.33%BlackRock,Inc.(9) 37,388,228 0 37,388,228 9.00%TheVanguardGroup,Inc.(andrelatedparties)(10) 38,775,577 0 38,775,577 9.30%FelixInvestmentsHoldingsII,LLC(11) 151,529,637 0 151,529,637 26.775%
* Lessthan1%.
(1) IncludesrestrictedstockunitsoverwhichexecutiveofficershavenovotingorinvestmentpowerheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlanasfollows:Mr.Cameron,189,944;Mr.Gaspar,567,988;Mr.Guderian,256,839;Mr.Muncrief,1,290,081;Mr.Vann355,308;andallNEOswhoarecurrentlyexecutiveofficers,2,660,160.Restrictedstockunitsheldbythenamedexecutiveofficersonlyincludeperformance-basedawards.
(2) IncludesrestrictedstockunitsandsharesofdeferredcommonstockoverwhichindependentdirectorshavenovotingorinvestmentpowerheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlanasfollows:Mr.Carrig,91,848;Mr.Herdman,91,848;Mr.Kurz,31,009;Ms.Williams,26,368;Mr.Work73,703;andallindependentdirectorsasagroup,314,776.Thesedirectorshavetherighttoacquirethesharesunderlyingtheserestrictedstockunitsandsharesofdeferredcommonstockwithin60daysofMarch11,2020.Restrictedstockunitsincludetime-basedawards.IncludesrestrictedsharesofcommonstockheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlan,whichwillvestonMay16,2020,asfollows:Mr.Kindick,15,000;Mr.Lentz,15,000;andMs.Lubel,15,000.
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(3) ThesharesindicatedrepresentstockoptionsgrantedundertheWPXEnergy,Inc.2013IncentivePlanthatarecurrentlyexercisableorwillbecomeexercisablewithin60daysofMarch11,2020.Sharessubjecttooptionscannotbevoted.
(4) Ownershippercentageisreportedbasedon565,937,533sharesofcommonstockoutstandingonMarch11,2020,plus,astotheholderthereofandnootherperson,thenumberofshares(ifany)thatthepersonhastherighttoacquireasofMarch11,2020,orwithin60daysofthatdate.Restrictedstockunitsthatdonotvestwithin60daysofMarch11,2020arenotincludedinownershippercentage.
(5) Includes10,000sharesownedbyMr.Carrig'sspouse,overwhichshepossessessolevotingandinvestmentpower.
(6) Includes129,979sharesownedbyanirrevocabletrustofwhichMr.Kindick'sspouseistheboththesoletrusteeandthesolebeneficiary.
(7) Messrs.PhillipsandSwansonwereappointedtoourBoardofDirectorseffectiveMarch6,2020.
(8) Includes1,800sharesownedbyMr.Cameron'sspouse,overwhichshepossessessolevotingandinvestmentpower.
(9) Theaddressofthisentityis55East52ndStreet,NewYork,NY10055.TheinformationprovidedisbasedonaSchedule13G/AfiledbyBlackRock,Inc.onoraboutFebruary6,2020.ThatfilingindicatesthatBlackRock,Inc.hassolevotingpowerasto35,741,427ofthesharesshown,soledispositivepowerastoall37,388,228sharesshownandshareddispositivepowerasto0ofthesharesshown.
(10) Theaddressofthisentityis100VanguardBoulevard,Malvern,Pennsylvania19355.TheinformationprovidedisbasedonaSchedule13G/AfiledbyTheVanguardGroup,Inc.onoraboutFebruary12,2020.ThatfilingindicatesthatTheVanguardGrouphassolevotingpowerasto213,668ofthesharesshown,soledispositivepowerasto38,538,600ofthesharesshownandshareddispositivepowerasto236,977ofthesharesshown.ThatfilingalsoindicatesthatVanguardFiduciaryTrustCompany,awholly-ownedsubsidiaryofTheVanguardGroup,Inc.,isthebeneficialownerof158,310ofthesharesshownasaresultofitsservingasinvestmentmanagerofcollectivetrustaccounts.ThatfilingfurtherindicatesthatVanguardInvestmentsAustralia,Ltd.,awholly-ownedsubsidiaryofTheVanguardGroup,Inc.,isthebeneficialownerof134,025ofthesharesshownasaresultofitsservingasinvestmentmanagerofAustralianinvestmentofferings.
(11) Theaddressofthisentityis153016thStreet,Suite500,Denver,Colorado8020.TheinformationprovidedisbasedonaForm3filedbyFelixInvestmentsHoldingsII,LLConoraboutMarch9,2020.ThatfilingindicatesthatFelixInvestmentsHoldingsII,LLCistherecordholderofthesharesreportedherein.FelixEnergyInvestmentsII,LLC("FelixEnergy")isthedirectandindirectsoleownerofFelixInvestments.EnCapEnergyCapitalFundX,L.P.("EnCapFundX")isamemberofFelixEnergythatholdstherighttoappointtwoofthethreerepresentativestotheboardofmanagersofFelixEnergy,andpursuanttothelimitedliabilitycompanyagreementofFelixInvestments,themembersoftheFelixInvestmentsboardofmanagersarerequiredtobecomprisedofthesameindividualsastheFelixEnergyboardofmanagers.EnCapFundXiscontrolledindirectlybyEnCapPartnersGP,LLC("EnCapPartnersGP").EnCapPartnersGPisthesolegeneralpartnerofEnCapPartners,LP("EnCapPartners"),whichisthemanagingmemberofEnCapInvestmentsHoldings,LLC("EnCapHoldings"),whichisthesolememberofEnCapInvestmentsGP,L.L.C.("EnCapInvestmentsGP"),whichisthesolegeneralpartnerofEnCapInvestmentsL.P.("EnCapInvestmentsLP").EnCapInvestmentsLPisthesolegeneralpartnerofEnCapEquityFundXGP,L.P.("EnCapFundXGP"),whichisthesolegeneralpartnerofEnCapFundX.EachofFelixEnergy,EnCapFundX,EnCapFundXGP,EnCapInvestmentsLP,EnCapInvestmentsGP,EnCapHoldings,EnCapPartnersandEnCapPartnersGPmaybedeemedtosharevotingordispositivepoweroverthereportedsecurities.
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SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE
Section16(a)oftheExchangeActrequiresourdirectorsandexecutiveofficers,andcertainpersonswhoownmorethantenpercentofourcommonstock,tofilewiththeSECinitialreportsofownershipandreportsofchangesinownershipofourcommonstockandotherequitysecurities.Directors,executiveofficersandthesegreater-than—ten-percentstockholdersarerequiredbySECregulationstofurnishuswithcopiesofallSection16(a)formstheyfile.
Toourknowledge,basedsolelyonareviewofthecopiesofthesereportsandotherinformationfurnishedtous,allSection16(a)filingrequirementsapplicabletoourdirectors,executiveofficersandgreater-than-ten-percentbeneficialownersduringandforthefiscalyearendedDecember31,2019,werecompliedwithonatimelybasis,exceptthatMr.Gaspardidnottimelyfileonereportwithrespecttoonetransaction.
OTHERMATTERSATMEETING
InaccordancewiththerequirementsofadvancenoticedescribedinourBylaws,nostockholdernominationsorstockholderproposalswillbepresentedattheAnnualMeeting.WeknowofnoothermattersthatmaycomebeforetheAnnualMeeting.However,ifanymatterscallingforavoteofthestockholders,otherthanthosereferredtointhisproxystatement,shouldproperlycomebeforethemeeting,thepersonsnamedintheenclosedproxywillvotesuchproxyaccordingtotheirindividualjudgment.
Tulsa,OklahomaApril7,2020
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ByOrderoftheBoardofDirectors,
StephenE.BrilzVice President and Corporate Secretary
MMMMMMMMMMMM C123456789 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000004 ENDORSEMENT_LINE______________ SACKPACK_____________ Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Votes submitted electronically must be MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 received by 11:59 p.m, Eastern Time, on May 20, 2020. Online GIof ntoo welwewct.reonnviicsivoontrienpgo, rts.com/WPX delete QR code and control # or scan the QR code — login details are located in the shaded bar below. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/WPX Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01 - John A Carrig 02 - Clay M. Gaspar 03 - Robert K. Herdman 04 - Kelt Kindick 05 - Karl F. Kurz 06 - Kimberly S. Lubel 07 - Richard E. Muncrief 08 - D. Martin Phillips 09 - Douglas E. Swanson, Jr. 10 - Valerie M. Williams For Against Abstain For Against Abstain 2. Say on Pay – An advisory vote on the approval of executive compensation. 3. Proposal to ratify the appointment of Ernst & Young LLP as the independent public accounting firm for the Company for the year ending December 31, 2020. Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C 1234567890 J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 1 U P X 4 5 6 0 4 9 0380MB MMMMMMMMM B Authorized Signatures — This section must be completed for your vote to count.
Please date and sign below. A Proposals — The Board recommend a vote FOR all nominees and FOR Proposals 2 and 3. Annual Meeting Proxy Card1234 5678 9012 345
The 2020 Annual Meeting of WPX Energy, Inc. Stockholders Thursday, May 21, 2020 9:30 a.m. (Central Time) Robert J. LaFortune Studio Tulsa Performing Arts Center 110 East Second Street Tulsa, Oklahoma, 74103 Directions to the Tulsa Performing Arts Center • lnterstate-44 going east: Take exit North Hwy. 75 to Tulsa, continue across bridge, and then take the Seventh Street exit to Boulder. Turn right onto Third Street. Continue to Cincinnati. • lnterstate-44 going west: Take 1-44 to 1-244. Exit downtown at First Street. Turn left onto Cincinnati. • Interstate 244 going west: Take the First Street exit; stay on First. Turn left onto Cincinnati. • Hwy. 51/64 going east: Take 1-244 east to Cincinnati exit. Turn right on Cincinnati to Third Street. • Hwy. 75 going south: Take the First Street exit to Cincinnati. Turn left on Cincinnati. • Hwy. 75 going north: Take the Seventh street exit to Boulder. Turn right onto Third Street. Continue to Cincinnati where there is parking. Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders. The material is available at: www.envisionreports.com/WPX q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + Notice of 2020 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for Annual Meeting Dennis C. Cameron and Stephen E. Brilz, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of WPX Energy, Inc. to be held on May 21, 2020 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side) Change of Address — Please print new address below. Comments — Please print your comments below. + C Non-Voting Items WPX Energy, Inc. Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.envisionreports.com/WPX