SECURITIES AND EXCHANGE COMMISSION
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Matador Resources Company
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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| | 2024 |
¨ | | Preliminary Proxy StatementNotice of Annual Meeting of Shareholders and |
| Proxy Statement |
June 13, 2024 | Dallas, Texas
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| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))One Lincoln Centre 5400 LBJ Freeway, Suite 1500 Dallas, Texas 75240 www.matadorresources.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held on June 13, 2024 |
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þ | | Definitive Proxy Statement |
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¨ | | Definitive Additional Materials |
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¨ | | Soliciting Material Pursuant to §240.14a-12 |
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To the Matador Resources Company |
(Name Shareholders:
Please join us for the 2024 Annual Meeting of Registrant as Specified In Its Charter) |
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(NameShareholders of Person(s) Filing Proxy Statement, if other thanMatador Resources Company. The meeting will be held at the Registrant) |
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Payment of Filing Fee (CheckHilton Anatole, Imperial Ballroom, 2201 N. Stemmons Freeway, Dallas, Texas 75207, on Thursday, June 13, 2024, at9:30 a.m., Central Daylight Time.
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One Lincoln Centre
5400 LBJ Freeway, Suite 1500
Dallas, Texas 75240
www.matadorresources.com
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 9, 2016
To the Matador Resources Company Shareholders:
Please join us for the 2016 Annual Meeting of Shareholders of Matador Resources Company. The meeting will be held at the Westin Galleria, Dallas Ballroom, 13340 Dallas Parkway, Dallas, Texas 75240, on Thursday, June 9, 2016, at 9:30 a.m., Central Daylight Time.
At the meeting, you will hear a report on our business and act on the following matters:
| following matters: (1) | Election of the threefour nominees for director named in the attached Proxy Statement; |
| (2) | Vote to approve the Company’s Amended and Restated Annual Incentive Plan; |
| (3) | Advisory vote to approve the compensation of our named executive officers as described in the attached Proxy Statement; |
| (3)Advisory vote on the frequency of future advisory votes to approve named executive officer compensation; (4) | Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2016; |
| 2024; and (5) | Vote on the shareholder proposal set forth in the attached Proxy Statement; and |
| (6) | Any other matters that may properly come before the meeting.
All shareholders of record at the close of business on April 16, 2024 are entitled to vote at the meeting or any postponement or adjournment of the meeting. A list of the shareholders of record is available at the Company’s offices in Dallas, Texas. |
All shareholders of record at the close of business on April 15, 2016 are entitled to vote at the meeting or any postponement or adjournment of the meeting. A list of the shareholders of record is available at the Company’s offices in Dallas, Texas.
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| By Order of the Board of Directors, |
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Joseph Wm. Foran |
Chairman and Chief Executive Officer |
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April 26, 2024 |
YOUR VOTE IS IMPORTANT!
Whether or not you will attend the meeting, please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning your proxy card to the address listed on the card.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on June 13, 2024:
Our Proxy Statement and the Annual Report to Shareholders for the fiscal year ended December 31, 2023 are available for viewing, printing and downloading at https://materials.proxyvote.com/576485. |
April 28, 2016
YOUR VOTE IS IMPORTANT!
Whether or not you will attend the meeting, please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning your proxy card to the address listed on the card.
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Shareholders to Be Held on June 9, 2016:
Our Proxy Statement and the Annual Report to Shareholders for the fiscal year ended December 31, 2015 are available for viewing, printing and downloading athttps://materials.proxyvote.com/576485.
TABLE OF CONTENTS
1Matador Resources Company |
2024 Proxy Statement
PROXY STATEMENT
Matador Resources Company
5400 LBJ Freeway, Suite 1500
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 9, 2016
13, 2024
This Proxy Statement is being mailed on or about April
28, 201626, 2024 to the shareholders of Matador Resources Company (“Matador” or the “Company”) in connection with the solicitation of proxies by the Board of Directors (the “Board”) of the Company to be voted at the Annual Meeting of Shareholders of the Company to be held at the
Westin Galleria, DallasHilton Anatole, Imperial Ballroom,
13340 Dallas Parkway,2201 N. Stemmons Freeway, Dallas, Texas
75240,75207, on June
9, 2016,13, 2024, at 9:30 a.m., Central Daylight Time (the “Annual
Meeting” or the “2024 Annual Meeting”), or at any postponement or adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. The address of the Company’s principal executive office is One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.
If you are a shareholder of record, you may vote in person by attending the meeting, by completing and returning a proxy by mail or by using the Internet or telephone. You may vote your proxy by mail by marking your vote on the enclosed proxy card and following the instructions on the card. To vote your proxy using the Internet or telephone, see the instructions on the proxy form and have the proxy form available when you access the Internet website or place your telephone call.
The named proxies will vote your shares according to your directions. If you sign and return your proxy but do not make any of the selections, the named proxies will vote your shares: (i) FOR the election of the threefour nominees for director as set forth in this Proxy Statement, (ii) FOR the approval of the Company’s Amended and Restated Annual Incentive Plan, (iii) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement, (iii) for future advisory votes on named executive officer compensation (the “Frequency Vote”) to occur EVERY YEAR and (iv) FOR the ratification of KPMG LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2016 and (v) AGAINST the shareholder proposal as set forth in this Proxy Statement regarding a majority voting standard for the election of directors. The2024. Your proxy may be revoked at any time before it is exercised by filing with the Company a written revocation addressed to the Corporate Secretary, by executing a proxy bearing a later date or by attending the Annual Meeting and voting in person.
The cost of soliciting proxies will be borne by the Company. In addition to the use of postal services and the Internet, proxies may be solicited by directors, officers and employees of the Company (none of whom will receive any additional compensation for any assistance they may provide in the solicitation of proxies) in person or by telephone.
The outstanding voting securities of the Company consist of
shares ofissued and outstanding common stock,
$0.01 par value
$0.01 per share
(“Common(the “Common Stock”). The record date for the determination of the shareholders entitled to notice of and to vote at the Annual Meeting, or any postponement or adjournment thereof, has been established by the Board as the close of business on April
15, 201616, 2024 (the “Record Date”). As of the Record Date, there were
124,780,249 shares of Common Stock outstanding and entitled to
vote 93,265,146 shares of Common Stock.vote.
The presence, in person or by proxy, of the holders of record of a majority of the outstanding shares entitled to vote is necessary to constitute a quorum for the transaction of business at the Annual Meeting, but if a quorum should not be present, the meeting may be adjourned from time to time until a quorum is obtained. A holder of Common Stock will be entitled to one vote per share on each matter properly brought before the meeting. Cumulative voting is not permitted in the election of directors.
The proxy card provides space for a shareholder to withhold voting forabstain with respect to any or all nominees for the Board. The electionaffirmative vote of directors requires a pluralitymajority of the votes cast by holders of shares present in person or represented by proxy and entitled to vote on the election of directors at the meeting. AllAnnual Meeting is required for the election of each nominee for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes cast” means the number of votes cast “for” the election of such nominee exceeds the number of votes cast “against” such nominee. See “Corporate Governance—Majority Vote in Director Elections” for additional information regarding election of directors.
2Matador Resources Company | 2024 Proxy Statement
With respect to the Frequency Vote, because this vote is non-binding, the choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
The other proposals require the affirmative vote of a majority of the shares
of Common Stock present in person or represented by proxy and entitled to vote at the meeting. Shares held by a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum.
Votes withheldOther than with respect to the election of
directors and the
Company’s directors will have no effect on the election of the nominees. In the case of the other proposals being submitted for shareholder approval,Frequency Vote, an abstention will effectively count as a vote cast against
such proposal.the remaining proposals. Broker non-votes on any matter as to which the broker has indicated on the proxy that it does not have discretionary authority to vote will be treated as shares not entitled to vote with respect to that
matter and therefore will have no effect upon the approval of such matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.
3Matador Resources Company | 2024 Proxy Statement
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully prior to voting. For more complete information regarding our
20152023 performance, please review our Annual Report on Form 10-K for the year ended December 31,
2015.20162023.
2024 Annual Meeting of StockholdersDate and Time: June 9, 2016, at 9:30 a.m., Central Daylight Time
Location: Westin Galleria, Dallas Ballroom, 13340 Dallas Parkway, Dallas, Texas 75240
Record Date: April 15, 2016
Shareholders
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| DATE AND TIME: | | Voting:LOCATION | | RECORD DATE: | | VOTING: |
| June 13, 2024 at 9:30 a.m., Central Daylight Time | | Hilton Anatole Imperial Ballroom 2201 N. Stemmons Freeway Dallas, Texas 75207 | | April 16, 2024 | | Shareholders as of the close of business on the Record Date are entitled to vote. Each share of Common Stock is entitled to one vote at the Annual Meeting. |
Voting Matters and Board Recommendation
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| Proposal | | | | Board Recommendation |
Proposal
Election of Four Director Nominees (page 15) | | Board
Recommendation
| FOR |
Election of Three Director Nominees to Serve for a Three-Year Term Expiring in 2019 (page 10)
| | | FOR | |
Approval of the Company’s Amended and Restated Annual Incentive Plan (page 29)
| | | FOR | |
Advisory Vote to Approve Named Executive Officer Compensation (page 35)44) | | | FOR | |
Advisory Vote on the Frequency of Future Advisory Votes to Approve Named Executive Officer Compensation (page 45) | 1 YEAR |
Ratification of the Appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for 20162024 (page 37)46) | | | FOR | |
Vote on the Shareholder Proposal Regarding a Majority Voting Standard for the Election of Directors (page 40)
| | | AGAINST | |
2015
The year 2023 was another outstanding year for Matador, including record oil and natural gas production, steadily decreasing costs and better-than-expected free cash flow. We utilized this free cash flow and the strength of our balance sheet, including over $500 million of cash at the beginning of 2023, to repay borrowings under the Credit Agreement (as defined below), make profitable investments in our oil and natural gas properties and our midstream businesses, including the acquisition of Advance Energy Partners Holdings, LLC (“Advance”), and pay a steadily increasing fixed dividend to our shareholders.
Advance Acquisition
On April 12, 2023, we completed the acquisition of Advance from affiliates of EnCap Investments L.P., including certain oil and natural gas properties, undeveloped acreage and midstream assets located primarily in Lea County, New Mexico and Ward County, Texas (the “Initial Advance Acquisition”). On December 1, 2023, we acquired additional interests from affiliates of EnCap Investments L.P., including overriding royalty interests and royalty interests in certain oil and natural gas properties located primarily in Lea County, New Mexico, most of which were included in the Initial Advance Acquisition (the “Advance Royalty Acquisition" and, together with the Initial Advance Acquisition, the “Advance Acquisition”). The Initial Advance Acquisition added approximately 18,500 net acres in the core of the northern Delaware Basin with approximately 99% of such acreage held by production and provided a significant increase in our drilling inventory with 206 gross (174 net) operated locations in our core target formations and an additional 38 gross (35 net) upside locations in the Wolfcamp D formation. This new acreage also provided further expansion opportunities for Pronto Midstream, LLC (“Pronto”), our wholly-owned midstream subsidiary operating in Lea County, New Mexico.
4Matador Resources Company | 2024 Proxy Statement
Business Highlights
In
2015,part as a result of the Advance Acquisition, Matador
grew its average daily production from approximately 100,000 barrels of oil and natural gas equivalent (“BOE”) per day in early January 2023 to just over 154,000 BOE per day in the fourth quarter of 2023. Matador also achieved record oil
and natural gas
reserves in 2023 as total proved oil and
average daily oil equivalent production. In addition, Matador successfully completed several important transactionsnatural gas reserves increased 29%, or approximately 103.0 million BOE year-over-year, to a record high of 460.0 million BOE, as compared to 357.0 million BOE in
2015, including (i) the merger with Harvey E. Yates Company (“HEYCO”), a subsidiary of HEYCO Energy Group, Inc., which added substantially to Matador’s Delaware Basin acreage position, (ii) Matador’s first issuance of senior unsecured notes, (iii) a follow-on equity offering and (iv) the sale of a portion of Matador’s midstream assets in Loving County, Texas to an affiliate of EnLink Midstream Partners, LP (“EnLink”).Business highlights achieved during 2015 include the following:
2022.Production Growth
| | | | | | | | | | | | | | |
| 26% | | 24% | | 25% |
| increase in oil production | | increase in natural gas production | | increase in daily oil equivalent production |
•A 35%26% increase in oil production from 3.3to a record 27.5 million barrels (“Bbl”) of oil produced in 2014 to 4.52023 from 21.9 million Bbl of oil produced in 2015.2022.
•A 24% increase in natural gas production from 15.3to a record 123.4 billion cubic feet (“Bcf”) of natural gas produced in 2014 to 27.72023 from 99.3 Bcf of natural gas produced in 2015.2022.
•A 55%25% increase in average daily oil equivalent production from 16,082 barrels of oil equivalent (“BOE”)to a record 131,813 BOE per day, including 9,09575,457 Bbl of oil per day and 41.9338.1 million cubic feet (“MMcf”) of natural gas per day, in 2014 to 24,9552023, from 105,465 BOE per day, including 12,30660,119 Bbl of oil per day and 75.9272.1 MMcf of natural gas per day, in 2015.2022.
•Continued drilling of longer laterals, with an average completed lateral length for operated wells turned to sales in 2023 of approximately 9,800 feet.
•Capital expenditures for drilling, completing and equipping wells (“D/C/E capital expenditures”) for 2023 of $1.16 billion, which was below our estimated range for 2023 D/C/E capital expenditures of $1.18 to $1.32 billion as provided on February 27, 2015,21, 2023 and was in the middle of the revised estimated range of $1.10 to $1.22 billion, as provided on July 25, 2023.
•Continued focus on increasing efficiency and innovation, including successfully implementing "simul-frac" operations, 100% dual-fuel utilization on Matador completed a business combination pursuant to which onewells and successful execution on our first two "U-turn" two-mile lateral wells.
5Matador Resources Company | 2024 Proxy Statement
Capital Resources and Financial Highlights
We achieved annual net income of its wholly-owned subsidiaries merged with HEYCO (the “HEYCO Merger”), combining certain$846.0 million and annual Adjusted EBITDA (a non-GAAP financial measure) of $1.85 billion in 2023 despite significantly lower realized weighted average oil and natural gas producing propertiesprices of $77.88 per barrel and undeveloped acreage located$3.25 per Mcf in Lea2023 as compared to $96.32 per barrel and Eddy Counties, New Mexico with$7.98 per Mcf in 2022. San Mateo Midstream, LLC (“San Mateo”), our midstream joint venture, achieved its Delaware Basin operations. Insecond-best annual net income of $131.0 million and record high annual Adjusted EBITDA (a non-GAAP financial measure) of $200.0 million in 2023.
Financial Strength
| | | | | | | | | | | | | | |
| $1.05 Billion | | $0.20 | | $38.2 Million |
| new capital | | dividend per share in the fourth quarter | | performance incentives received from Five Point |
•The generation of free cash flow in all four quarters of 2023.
•The amendment of our dividend policy in the HEYCO Merger, Matador obtained approximately 58,600 gross (18,200 net) acres strategically located between Matador’s existing acreagefourth quarter of 2023, pursuant to which we increased the quarterly cash dividend from $0.15 per share of Common Stock to $0.20 per share of Common Stock.
•The receipt of $38.2 million in its Ranger and Rustler Breaks prospect areas.performance incentives directly from Five Point Energy, LLC, our joint venture partner in San Mateo (“Five Point”).
On April 14, 2015, Matador issued $400.0
•The issuance of $500.0 million of 6.875% senior unsecured notes due 2023 in a private placement and, on October 21, 2015, Matador exchanged all of the privately-placed senior notes for a likeaggregate principal amount of 6.875% senior notes due 2028 (the "2028 Notes").
•The revision of our Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) at our spring and fall redetermination processes to collectively (i) increase the borrowing base to $2.50 billion, as compared to $2.25 billion at December 31, 2022, (ii) increase the elected borrowing commitment to $1.325 billion, as compared to $775.0 million at December 31, 2022, (iii) increase the maximum facility amount to $2.00 billion, as compared to $1.50 billion at December 31, 2022 and (iv) add two new banks to our lending group.
•The amendment of San Mateo’s revolving credit facility (the “San Mateo Credit Facility”) in October 2023 to
(i) increase the lender commitments from $485.0 million to $535.0 million and (ii) add a new bank to San Mateo’s lending group.
6Matador Resources Company | 2024 Proxy Statement
Environmental, Social and Governance (“ESG”) Initiatives (page 33)
At Matador, we are committed to creating long-term value in a responsible manner. Our aim is to reliably and profitably provide the energy that have been registered undersociety needs in a manner that is safe, protects the Securities Act of 1933, as amended.
On April 21, 2015, Matador completed a public offering of 7,000,000 shares of its common stock for net proceeds of approximately $187.6 million.
Onenvironment and is consistent with the industry’s best practices and the highest applicable regulatory and legal standards. In alignment with this goal, we maintain an active ESG program that is overseen and supported by senior management and the Board’s Environmental, Social and Corporate Governance Committee. In October 1, 2015, Matador completed2023, we were pleased to issue Matador’s annual Sustainability Report, which included quantitative metrics aligned with standards developed by an industry leader, the sale of its wholly-owned subsidiary that owned certain natural gas gatheringSustainability Accounting Standards Board (“SASB”). For additional information on the Company’s ESG efforts, see “Corporate Governance—Environmental, Social and processing assetsGovernance (ESG) Initiatives” on page 33. Information included in the Delaware Basin in Loving County, Texas to EnLink for cash consideration of approximately $143.4 million, excluding customary purchase price adjustments.
our Sustainability Report is not incorporated into this Proxy Statement.
Director Nominees (page 10)15)
Our Board currently has
nine11 members
and is divided into three classes of directors, designated Class I, Class II and Class III. Directors are elected for three-year terms. The table below provides certain summary information about each nominee for director named in this Proxy
Statement. | | | | | | | | |
Name | | Age | | Director Since | | Principal Occupation | | Committee Memberships |
| Gregory E. Mitchell* | | 64 | | 2011 | | President and Chief Executive Officer, Toot’n Totum Food Stores, LLC | | CG |
| Dr. Steven W. Ohnimus* | | 69 | | 2004 | | Retired, Formerly General Manager — Partner Operated Ventures, Unocal Corporation | | A, OP, P |
| | | | |
| Craig T. Burkert* | | 59 | | ** | | Chief Financial Officer, ROMCO Equipment Co. | | ** |
| | | | | | | | | | | | | | | |
| Name | Age | Director Since | Principal Occupation | Committee Memberships | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| William M. Byerley* | 70 | 2016 | Retired Partner, PricewaterhouseCoopers LLP (PwC) | A,ESG,MM | |
| Monika U. Ehrman* | 46 | 2019 | Professor of Law, Southern Methodist University Dedman School of Law | ESG,E,SPC,MM,O,P | |
| | | | | |
| | | | | |
| Kenneth L. Stewart* | 70 | 2017 | Retired EVP, Compliance and Legal Affairs, Children’s Health System of Texas; Retired Partner, Chair—United States, Norton Rose Fulbright US LLP | ESG,E,SPC,CM | |
| Susan M. Ward* | 65 | 2024 | Former Head, M&A and Commercial Finance, Shell Oil Company | A,ESG,MM,P | |
| ** |
| A | Mr. Burkert has not previously served on our Board. We anticipate that Mr. Burkert will be appointed to the Audit Committee following the Annual Meeting. |
ACM | AuditCapital Markets and Finance Committee |
CGE | Executive Committee |
| ESG | Environmental, Social and Corporate Governance Committee |
OPMM | Midstream and Marketing Committee |
| O | Operations and Engineering Committee |
| P | Prospect Committee |
| SPC | Strategic Planning and Compensation Committee |
Amended and Restated Annual Incentive Plan (page 29)
The Company previously sponsored and maintained the
7Matador Resources Company Annual Incentive Plan for Management and Key Employees, effective January 1, 2012. On February 19, 2016, our Board adopted, subject to shareholder approval, the Matador Resources Company Amended and Restated Annual Incentive Plan for Management and Key Employees (the “Incentive Plan”).The Incentive Plan is designed to link executive decision-making and performance with the Company’s goals, reinforce these goals and ensure the highest level of accountability for the success of the Company as a whole. More information regarding the Incentive Plan, including a description thereof, is set forth below beginning on page 29.
|
2024 Proxy Statement
Executive Compensation Highlights (page 43)50)
Our Executive Compensation Philosophy
Our compensation program is designed to reward, in both the short-termshort term and the long-term,long term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and the achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork, as:
•teamwork;
•recruiting and mentoring future leaders within Matador to drive long-term shareholder value;
•individual performance in light of general economic and industry-specificconditions, conditions;
•relationships with shareholders and vendors, vendors;
•level of job responsibility;
•industry experience;
•general professional growth; and
•the ability to to:
◦manage and enhance production from our existing assets, the ability to assets;
◦explore new opportunities to increase oil and natural gas production, the ability to production;
◦identify and acquire additional acreage, the ability to acreage;
◦improve total shareholder returns;
◦increase year-over-year proved reserves, the ability to reserves;
◦control unit production costs, level of job responsibility, industry experiencecosts; and general professional growth.Our Board has
◦pursue midstream opportunities.
For a “pay for performance” philosophy and recognizes the leadership of Mr. Joseph Wm. Foran, our Chairman and Chief Executive Officer, and our other executive officers in contributing to the Company’s success in 2015. Accordingly, approximately 87% of Mr. Foran’s 2015 total compensation was performance based with approximately 57% of his total compensation consisting of long-term incentive awards. Detailsdiscussion of our executive compensation are shown in the 2015 Summaryprogram, see “Executive Compensation— Compensation TableDiscussion and Analysis” beginning on page 56.
50.
8Matador Resources Company | 2024 Proxy Statement
INFORMATION ABOUT THE ANNUAL MEETING
INFORMATION ABOUT THE ANNUAL MEETING
We are furnishing you this Proxy Statement in connection with the solicitation of proxies by the Board to be used at the Annual Meeting and any adjournment thereof. The Annual Meeting will be held on Thursday, June
9, 201613, 2024, at 9:30 a.m., Central Daylight Time. We are sending this Proxy Statement to our shareholders on or about April
28, 2016.26, 2024.
All references in this Proxy Statement to “we,” “our,” “us,” “Matador” or the “Company” refer to Matador Resources Company, including our subsidiaries and affiliates.
What is the purpose of the Annual Meeting?
At the Annual Meeting, shareholders will act upon the
following matters outlined in the Annual Meeting
notice, including the following:notice:•the election of the threefour nominees for director named in this Proxy Statement for a term expiring at the 2019 Annual Meeting of Shareholders;
Statement;the approval of the Company’s Amended and Restated Annual Incentive Plan;
•an advisory vote to approve the compensation of our named executive officers as described herein;
•an advisory vote on the frequency of future advisory votes to approve the compensation of our named executive officers;
•the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2016;2024; and
the vote on the shareholder proposal as set forth in this Proxy Statement regarding a majority voting standard for the election of directors; and
•any other matters that may properly come before the meeting.
What are the Board’s voting recommendations?
•FORthe election of the threefour nominees for director named in this Proxy Statement for a term expiring at the 2019 Annual Meeting of Shareholders;Statement;
•FOR the approval of the Company’s Amended and Restated Annual Incentive Plan;
FORthe approval, on an advisory basis, of the compensation of the Company’s named executive officers;
•FOR, on an advisory basis, future advisory votes to approve the compensation of the Company’s named executive officers to occur EVERY YEAR; and
•FOR the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2016; and2024.
AGAINST the approval of the shareholder proposal as set forth in this Proxy Statement regarding a majority voting standard for the election of directors.
Shareholders as of the close of business on April
15, 201616, 2024 are eligible to vote their shares at the Annual Meeting. As of the Record Date, there were
93,265,146124,780,249 shares of our Common Stock outstanding. Each share of Common Stock is entitled to one vote at the Annual Meeting.
9Matador Resources Company | 2024 Proxy Statement
Why did I receive a Notice Regarding the Internet Availability of Proxy Materials in the mail instead of a full set of proxy materials?
Securities and Exchange Commission (“SEC”) rules allow companies to furnish proxy materials over the Internet. We have elected to send a separate Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our shareholders instead of a paper copy of the proxy materials. This approach conserves natural
resources and reduces the costs of printing and distributing our proxy materials while providing shareholders with a convenient way to access our proxy materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy of proxy materials, including a proxy card or voting instruction form, may be found in the Notice. In addition, shareholders may request to receive future proxy materials in printed form by mail or electronically by email by following the instructions in the Notice. A shareholder’s election to receive proxy materials by mail or email will remain in effect until the shareholder terminates it.
•attend the Annual Meeting and vote in person; or
•dial the toll-free number listed on the Notice, proxy card or voting instruction form provided by your broker. Easy-to-follow voice prompts allow you to vote your shares and confirm that your voting instructions have been properly recorded. Telephone voting will be available 24 hours a day and will close at 11:59 p.m., Eastern Daylight Time, on June 8, 2016;12, 2024;
•go to the website www.proxyvote.com and follow the instructions, then confirm that your voting instructions have been properly recorded. If you vote using the website, you can request electronic delivery of future proxy materials. Internet voting will be available 24 hours a day and will close at 11:59 p.m., Eastern Daylight Time, on June 12, 2024; or
| • | | go to the websitewww.proxyvote.com and follow the instructions, then confirm that your voting instructions have been properly recorded. If you vote using the website, you can request electronic delivery of future proxy materials. Internet voting will be available 24 hours a day and will close at 11:59 p.m., Eastern Daylight Time on June 8, 2016; or
|
•if you received a paper copy of your proxy materials and elect to vote by written submission, mark your selections on the proxy card, date and sign it, and return the card in the pre-addressed, postage-paid envelope provided.
Why did I receive paper copies of proxy materials?
We are providing certain shareholders with paper copies of the proxy materials instead of a separate Notice. If you received a paper copy and would no longer like to receive printed proxy materials, you may consent to receive all future proxy materials electronically via email or the Internet. To sign up for electronic delivery, please follow the instructions provided in your proxy materials. When prompted, indicate that you agree to receive or access shareholder communications electronically in the future.
Will each shareholder in our household receive proxy materials?
Generally, no. To the extent you are receiving printed proxy materials, we try to provide only one set of proxy materials to be delivered to multiple shareholders sharing an address, unless you have given us other instructions. Any shareholder at a shared address may request delivery of single or multiple copies of printed proxy materials for future meetings by contacting us at:
Matador Resources Company
Attention:
Corporate SecretaryInvestor Relations
5400 LBJ Freeway, Suite 1500
Email: investors@matadorresources.com
Telephone: (972) 371-5200
We undertake to deliver promptly, upon written or oral request, a copy of proxy materials to a shareholder at a shared address to which a single copy of the proxy materials was delivered. Requests should be directed to
the Corporate SecretaryInvestor Relations at the address or phone number set forth above.
10Matador Resources Company | 2024 Proxy Statement
Who will be admitted to the Annual Meeting?
Admission to the Annual Meeting will be limited to our shareholders of record, persons holding proxies from our shareholders, beneficial owners of our Common Stock and our employees. If your shares are registered in your name, we will verify your ownership at the meeting in our list of shareholders as of the Record Date. If your shares are held through a broker, bank or other nominee, you must bring proof of your ownership of the shares. This proof could consist of, for example, a bank or brokerage firm account statement or a letter from your bank or broker confirming your ownership as of the Record Date. You may also send proof of ownership to us at Matador Resources Company, Attention: Corporate Secretary, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240, or email: investors@matadorresources.com, before the Annual Meeting, and we will send you an admission card.
If I vote via telephone or the Internet or by mailing my
Proxy Card,proxy card, may I still attend the Annual Meeting?
What if I want to change my vote?
You may revoke your proxy before it is voted by submitting a new proxy with a later date (by mail, telephone or
the Internet), by voting at the Annual Meeting or by filing a written revocation with our Corporate Secretary. Your attendance at the Annual Meeting will not automatically revoke your proxy.
What constitutes a quorum?
A majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum. If you vote by telephone or Internet or by returning your
Proxy Card,proxy card, you will be considered part of the quorum. The Inspector of Election will treat shares represented by a properly executed proxy as present at the meeting. Abstentions and broker non-votes will be counted for purposes of determining a quorum. A broker non-vote occurs when a nominee holding shares for a beneficial owner submits a proxy but does not vote on a particular proposal because the nominee does not have discretionary voting power for that item and has not received instructions from the beneficial owner.
How many votes will be required to approve a proposal?
Election
The affirmative vote of a majority of the votes cast by holders of shares of Common Stock present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting will be by a plurality of votes cast at the Annual Meeting. Votes may be cast in favor ofis required for the election of each director nominee or withheld.for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes cast” means the number of votes cast “for” such nominee exceeds the number of votes cast “against” such nominee.
With respect to the Frequency Vote, because this vote is non-binding, the choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
With respect to all other matters, the affirmative vote of the holders of a majority of the shares
of Common Stock, present in person or
represented by proxy and entitled to vote at the Annual Meeting, is
required to take any other action.required.
Shares cannot be voted at the Annual Meeting unless the holder of record is present in person or
represented by proxy.
11Matador Resources Company | 2024 Proxy Statement
Can brokers who hold shares in street name vote those shares if they have received no instructions?
Under the rules of the New York Stock Exchange (“NYSE”), brokers may not vote the shares held by them in street name for their customers and for which they have not received instructions, except with respect to a routine matter. The only matter to be voted on at the Annual Meeting that is considered routine for these purposes is the ratification of the appointment of our independent registered public accounting firm. Accordingly, brokers may not vote your shares on any other matter if you have not given specific instructions as to how to vote. Please be sure to give specific voting instructions to your broker so that your vote will be counted.
How will you treat abstentions and broker non-votes?
A plurality of the votes cast at the Annual Meeting is required to elect each nominee for director. Accordingly, abstentions and broker non-votes will have no effect on the election of directors.
Shares of a shareholder who abstains from voting on any or all proposals will be included for the purpose of determining the presence of a quorum.
Votes withheldOther than with respect to the election of
directors and the
Company’s directors will have no effect on the election of the nominees. In the case of the other proposals being submitted for shareholder approval,Frequency Vote, an abstention will effectively count as a vote cast against
such proposal.the remaining proposals. Broker non-votes on any matter, as to which the broker has indicated on the proxy that it does not have discretionary authority to vote, will be treated as shares not entitled to vote with respect to that
matter and therefore will have no effect upon the approval of such matter. However, such shares will be considered present and entitled to vote for quorum purposes so long as they are entitled to vote on at least one other matter.
Who pays the solicitation expenses?
We will bear the cost of solicitation of proxies. Proxies may be solicited by mail or personally by our directors, officers or employees, none of whom will receive additional compensation for such solicitation. Those holding shares of Common Stock of record for the benefit of others, or nominee holders, are being asked to distribute proxy soliciting materials to, and request voting instructions from, the beneficial owners of such shares. We will reimburse nominee holders for their reasonable out-of-pocket expenses.
Where can I find the voting results of the Annual Meeting?
We will announce preliminary voting results at the Annual Meeting, and we will publish final results in a Current Report on Form 8-K that will be filed with the SEC within four business days of the Annual Meeting. You may obtain a copy of this and other reports free of charge at
www.matadorresources.com,, by contacting our Investor Relations Department at (972) 371-5200 or investors@matadorresources.com or by accessing the SEC’s website at
www.sec.gov. www.sec.gov.
Will the Company’s independent registered public accounting firm be available at the Annual Meeting to respond to questions?
Yes. The Audit Committee of the Board has approvedappointed KPMG LLP to serve as our independent registered public accounting firm for the year ending December 31, 2016.2024. Representatives of KPMG LLP will be present at the Annual Meeting. They will have an opportunity to make a statement, if they desire to do so, and will be available to respond to appropriate questions.questions
.
Where can I contact the Company?
Matador Resources Company
Attention: Investor Relations
5400 LBJ Freeway, Suite 1500
Our telephone number is (972) 371-5200.
12Matador Resources Company | 2024 Proxy Statement
PROPOSAL 1 —
PROPOSAL 1| ELECTION OF DIRECTORS
The Board currently consists of
nine members. Our Board11 members and is divided into three classes of directors, designated Class I, Class II and Class III, with the term of office of each director ending on the date of the third annual meeting following the annual meeting at which such director’s class was elected. The number of directors in each class will be as nearly equal as
possible at all times.possible. The
current Class I directors are
William M. Byerley, Monika U. Ehrman, Julia P. Forrester Rogers and Kenneth L. Stewart. Each of Ms.
Margaret B. ShannonEhrman and Messrs.
Carlos M. Sepulveda, Jr.Byerley and
George M. Yates, who will hold office until the 2018 Annual Meeting of Shareholders and until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal. TheStewart is a Class
II directors are Messrs. Gregory E. Mitchell and Don C. Stephenson and Dr. Steven W. Ohnimus. Mr. Stephenson’s term will expireI director nominee at the
Annual Meeting, creating a vacancy on the Board. Messrs. Craig T. Burkert and Mitchell and Dr. Steven W. Ohnimus are the Class II director nominees at the Annual Meeting. The Class III directors are Messrs. Joseph Wm. Foran, David M. Laney and Reynald A. Baribault, who will hold office until the 2017 Annual Meeting of Shareholders and until the election and qualification of their respective successors or until their earlier death, retirement, resignation or removal.Mr. Burkert has been nominated by the Board for election as a Class II director at the Annual Meeting and Mr. Mitchell and Dr. Ohnimus have been nominated by the Board for re-election as Class II directors at the2024 Annual Meeting, in each case, to hold office until the 20192027 Annual Meeting of Shareholders and until the election and qualification of their respective successors or until theirhis or her earlier death, retirement, resignation or removal.
Ms. Rogers’ term will expire at the 2024 Annual Meeting. The Class II directors are Shelley F. Appel, R. Gaines Baty, James M. Howard and Susan M. Ward. The terms of Ms. Appel and Messrs. Baty and Howard will each continue until the 2025 Annual Meeting of Shareholders or his or her earlier death, retirement, resignation or removal. Ms. Ward was appointed to the Board following the 2023 Annual Meeting and is therefore a Class II nominee at the 2024 Annual Meeting, to hold office until the 2025 Annual Meeting of Shareholders or her earlier death, retirement, resignation or removal. The Class III directors are Joseph Wm. Foran, Reynald A. Baribault and Timothy E. Parker, the terms of whom will each continue until the 2026 Annual Meeting of Shareholders or his earlier death, retirement, resignation or removal.
The Board believes that each of the director nominees possesses the qualifications described below in “Corporate Governance — Governance—Board Committees — Committees—Nominating Compensation and Planning Committee.” That is, the Board believes that each nominee possesses: (i)
•deep experience at the policy making level in business, government or education; (ii)
•the availability and willingness to devote adequate time to Board duties; (iii)
•the character, judgment and ability to make independent analytical, probing and other inquiries; (iv)
•a willingness to exercise independent judgment along with a willingness to listen and learn from others; (v)
•business knowledge and experience that provides a balance with the other directors; (vi)
•financial independence; and (vii) with respect to incumbent directors,
•excellent past performance on the Board.
13Matador Resources Company | 2024 Proxy Statement
Director Skills & Experience
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Foran | Parker | Baty | Appel | Baribault | Byerley | Ehrman | Howard | Rogers | Stewart | Ward |
| Director Skills & Experience |
| Senior Leadership | • | • | • | | • | • | • | • | • | • | • |
| Energy Industry | • | • | | • | • | • | • | • | | • | • |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Finance & Accounting | • | • | | • | • | • | | • | | • | • |
| Human Capital Management | • | • | • | | • | • | • | | • | • | • |
| Legal, Regulatory & Environmental | • | • | | • | • | • | • | | • | • | • |
| Risk Assessment & Management | • | • | • | • | • | • | • | • | • | • | • |
| Strategic Planning | • | • | • | • | • | • | • | | • | • | • |
| Corporate Governance & Ethics | • | • | • | • | • | • | • | • | • | • | • |
| Capital Markets & M&A | • | • | | • | • | • | | • | | • | • |
| Demographic Background |
| Board Tenure | 21 | 6 | 8 | 1 | 10 | 8 | 5 | 3 | 7 | 7 | 0 |
Age1 | 71 | 49 | 73 | 34 | 60 | 70 | 46 | 73 | 64 | 70 | 65 |
| Gender Diversity | | | | • | | | • | | • | | • |
| Racial/Ethnic Diversity | | | | | | | • | | | | |
(1) As of April 16, 2024.
The information provided below is biographical information about each of the nominees, as well as a description of the experience, qualifications, attributes or skills that led the Board to conclude that the individual should be nominated for election as a director of the Company.
Nominees
Mr. Craig T. Burkert. Mr. Burkert, age 59, No director or director nominee currently holds, or has been nominated for election by the Board as a Class II director at the Annual Meeting. With over 30 years of experience in distribution businesses, he currently serves as the Chief Financial Officer of ROMCO Equipment Co., a dealer of heavy construction equipment that serves customers in a variety of sectors throughout most of Texas. Mr. Burkert joined ROMCO in 1984 as a Product Manager, later serving as a Branch Manager from 1986 to 1989 and as General Manager from 1989 to 1994. In 1994 he left ROMCO to start a dealership in the lift truck industry in New England, but he returned to ROMCO in 2003 to take on his current position of Chief Financial Officer, where he is responsible for all financial, administrative and technology aspects of the company. Mr. Burkert has been involved with Matador since its inception. He has served on the Shareholder Advisory Committee for Board Nominations since 2014, has acted as a special advisor to the Company for midstream related matters and is an active participant in shareholder meetings and various Board activities. Mr. Burkert’s accounting and financial knowledge and leadership experience, coupled with his familiarity with the operations and corporate governance of the Company, provides our Board with a valuable perspective on these matters and other business issues.
Mr. Gregory E. Mitchell. Mr. Mitchell, age 64, joined our Board in June 2011. With 47 years of grocery and petroleum retailing experience, he is currently President and Chief Executive Officer of Toot’n Totum Food Stores, LLC, his family company located in Amarillo, Texas. The company, founded in 1950, consists of over 100 convenience stores, car washes, lube centers and check cashing locations, with an employee base of over 1,000 team members in the organization. His experienceheld within the petroleum industry includes extensive
negotiationspast five years, any other directorships with various major refiners in the United States. A 1973public companies.
14Matador Resources Company | 2024 Proxy Statement
PROPOSAL 1
Nominees
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MR. WILLIAM M. BYERLEY | Retired Partner, PricewaterhouseCoopers LLP (PwC) | Class I |
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| Biographical Information: | |
| Mr. Byerley was appointed to the Board in 2016 and is chair of the Board’s Audit Committee. Mr. Byerley retired from PricewaterhouseCoopers LLP (PwC) in 2014. From 1988 through 2014, Mr. Byerley was a Partner with PwC, serving as an Assurance Partner on various audit engagements primarily for energy sector clients. From 1988 through 1990, Mr. Byerley served in the PwC National Office Accounting Services Group. Mr. Byerley received a Bachelor of Business Administration degree in 1975 and a Master of Business Administration degree in 1976, both from Southern Methodist University. He is a licensed Certified Public Accountant. |
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| Director | | |
Director since: 2016 | | |
Independent: Yes | | |
Age: 70 | | |
| Committees: | Qualifications: |
•Audit (Chair) | Mr. Byerley’s extensive experience in public accounting and longtime service to energy sector clients of PwC provide the Board with invaluable financial and accounting expertise, particularly for oil and natural gas companies, as well as strong accounting and financial oversight and risk management expertise. |
•Environmental, Social and Corporate Governance |
•Marketing and Midstream |
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15Matador Resources Company | 2024 Proxy Statement
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MS. MONIKA U. EHRMAN | Professor of Law, Southern Methodist University Dedman School of Law | Class I |
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| Biographical Information: | |
| Professor Ehrman was appointed to the Board in 2019 and is co-chair of the Board’s Marketing and Midstream Committee. She is Professor of Law, Southern Methodist University Dedman School of Law, and a Professor of Engineering (by courtesy), Southern Methodist University Lyle School of Engineering. Prior to joining SMU, in 2023, she was Associate Professor of Law, University of North Texas at Dallas College of Law and a tenured Professor of Law at the University of Oklahoma College of Law, where she led the Oil & Gas, Natural Resources, and Energy (ONE) Program and served as the Faculty Director of the ONE Center. While at OU, she taught in the J.D. and graduate programs at the College of Law and in the Executive Energy Management Program at the Price College of Business. Professor Ehrman joined the University of Oklahoma College of Law in 2013 as Associate Professor of Law. Prior to teaching, she served as in-house legal counsel for two oil and natural gas companies from 2008 to 2012 and as an associate oil and natural gas attorney at an international law firm from 2005 to 2008. Before law school, Professor Ehrman worked as a petroleum engineer in the upstream, midstream and pipeline sectors of the energy industry. In addition to serving on various oil and natural gas law committees, she also served as an Editor of the Oil and Gas Reporter for the Institute for Energy Law. Professor Ehrman is currently Treasurer and on the Executive Committee of the Foundation for Natural Resources and Energy Law, and she is on the Editorial Board of the Journal of World Energy Law & Business (published by Oxford University Press). Professor Ehrman received her Bachelor of Science degree in Petroleum Engineering from the University of Alberta; J.D. from Southern Methodist University Dedman School of Law; and Master of Laws degree from Yale Law School. |
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| Director |
Director since: 2019 |
Independent: Yes |
Age: 46 |
| Committees: |
•Marketing and Midstream (Co-Chair) |
•Environmental, Social and Corporate Governance |
•Executive |
•Operations and Engineering |
•Prospect |
•Strategic Planning and Compensation |
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| Qualifications: |
| Professor Ehrman provides valuable insight to our Board on our engineering and midstream operations as well as legal and governance matters. |
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16Matador Resources Company | 2024 Proxy Statement
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MR. KENNETH L. STEWART | Retired EVP, Compliance and Legal Affairs, Children’s Health System of Texas; Retired Partner, Chair—United States, Norton Rose Fulbright US LLP | Class I |
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| Biographical Information: | |
| Mr. Stewart was appointed to the Board in 2017. Mr. Stewart was most recently employed as Executive Vice President, Compliance and Legal Affairs, for Children’s Health System of Texas from January 1, 2019 until he retired on January 2, 2021. At that time, Children’s Health System of Texas and its affiliates constituted one of the ten largest pediatric hospital systems in the United States. Previously, effective December 31, 2018, Mr. Stewart retired from Norton Rose Fulbright US LLP, the United States operations of Norton Rose Fulbright, an international legal practice, which then had over 3,700 legal professionals in over 50 cities worldwide. At his retirement, Mr. Stewart was a Partner with Norton Rose Fulbright and held the position of Chair—United States. Mr. Stewart began his legal career with Fulbright & Jaworski LLP, the predecessor to Norton Rose Fulbright US LLP, and previously held positions of Global Chair of the international organization, Managing Partner of the United States region and Partner-in-Charge of the Dallas office. Prior to entering into full-time management for his firm in 2012, he engaged in a domestic and international transactional legal practice, focusing principally on merger, acquisition, financing and joint venture activities for both public and privately-held entities. Mr. Stewart has extensive experience representing and advising companies and their executive officers and boards of directors engaged in oil and natural gas exploration and midstream activities. Since his retirement from Norton Rose Fulbright, Mr. Stewart has acted, and from time to time continues to act, on a limited basis as an independent contractor senior business consultant to family offices for which he provided services during his legal career. Mr. Stewart graduated from the University of Arkansas School of Business in 1976 with a Bachelor of Science in Business Administration degree in Accounting and was licensed as a Certified Public Accountant in Texas in 1981 (certificate now on non-practice status). He graduated with honors from Vanderbilt Law School in 1979 and was a member of the Order of the Coif. Mr. Stewart has been active in numerous civic and professional organizations in the Dallas area in the past, including among others, the Dallas Regional Chamber, The Center for American and International Law and the Dallas Citizens Council. |
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| Director |
Director since: 2017 |
Independent: Yes |
Age: 70 |
| Committees: |
•Capital Markets and Finance |
•Environmental, Social and Corporate Governance |
•Executive |
•Strategic Planning and Compensation |
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| Qualifications: |
| Mr. Stewart’s extensive experience representing public companies, and particularly oil and natural gas companies, along with his years of management experience, provide our Board with important legal, corporate governance and leadership insight. |
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17Matador Resources Company | 2024 Proxy Statement
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MS. SUSAN M. WARD | Former Head, M&A and Commercial Finance, Shell Oil Company | Class II |
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| Biographical Information: | |
| Ms. Ward was appointed to the Board in 2024. Ms. Ward is a former 12-year Senior Executive of Shell Oil Company (“Shell”) with over 20 years of service at retirement in 2019. Her senior roles at Shell included Head, M&A and Commercial Finance for all of Shell’s businesses in the Americas; Vice President, Chief Financial Officer and Board member of Shell Midstream Partners, which she helped take public for Shell in 2014; and Vice President, Upstream Commercial Finance, Shell International Exploration & Production B.V. while based in The Hague for Royal Dutch Shell. She also served as a Board member of Shell’s deepwater drillship joint venture with Noble Corporation. Ms. Ward has been an independent, non-executive Board member of Crescent Midstream (“Crescent”) since July 2023. Crescent is an independent energy company providing offshore and onshore crude oil services in the Gulf of Mexico and Louisiana. Prior to joining Shell in 1998, Ms. Ward worked as an investment banker in the energy sector for 11 years, including as a Managing Director in the Natural Resources and Energy investment banking group of UBS Securities. She began her career working for Exxon as a refining process engineer and subsequently worked in Mobil’s Finance organization at its New York City headquarters. Ms. Ward earned a Bachelor of Chemical Engineering degree from Villanova University with honors and a Master of Business Administration in Finance with distinction from the Wharton School of the University of Pennsylvania. She has served on Villanova’s Board of Trustees since 2018. She has been a member of the National Association of Corporate Directors since 2016. |
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| Director |
Director since: 2024 |
Independent: Yes |
Age: 65 |
| Committees: |
•Audit |
•Environmental, Social and Corporate Governance |
•Marketing and Midstream |
•Prospect |
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| Qualifications: |
| Mr. Ward’s extensive experience as a senior executive in the energy industry and midstream experience in particular provide our Board with industry, management and leadership insight. |
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Vote Required
The affirmative vote of
the University of Oklahoma with a
Bachelor of Business Administration degree, Mr. Mitchell was appointed by former Governor William Clements to the Texas Higher Education Coordinating Board, where he served from 1987 through 1993. Additionally, he has served as Chairman of the Amarillo Chamber of Commerce, Chairman of the United Way of Amarillo and Canyon, Chairman of the Harrington Foundation and President of the Amarillo Area Foundation. Mr. Mitchell is a former director of the Holding Committee of Amarillo National Bank, former board member of Cal Farley’s Boys Ranch and former Chairman of the Cal Farley’s Boys Ranch Foundation. Mr. Mitchell’s experience as President and Chief Executive Officer of his large family business provides our Board with extensive business, strategic and executive leadership experience.Dr. Steven W. Ohnimus. Dr. Ohnimus, age 69, was first elected to our Board in January 2004. He spent his entire professional career from 1971 to 2000 with Unocal Corporation, an integrated energy company. From 1995 to 2000, he was General Manager — Partner Operated Ventures, where he represented Unocal’s non-operated international interests at board meetings, management committees and other high level meetings involving projects in the $200 million range in countries such as Azerbaijan, Bangladesh, China, Congo, Myanmar and Yemen. From 1994 to 1995, Dr. Ohnimus was General Manager of Asset Analysis, where he managed and directed planning, business plan budgeting and scenario plans for the domestic and international business unit with an asset portfolio totaling $5.5 billion. From 1990 to 1994, Dr. Ohnimus was Vice President and General Manager, Unocal Indonesia, located in Balikpapan, operating five offshore fields and one onshore liquid extraction plant and employing 1,200 nationals and 50 expatriates. From 1989 to 1990, he served as Regional Operations Manager in Anchorage, Alaska, and from 1988 to 1989, he was District Operations Manager in Houma, Louisiana. From 1981 to 1988, Dr. Ohnimus was in various management assignments in Houston and Houma, Louisiana, and from 1971 to 1981 he handled various technical assignments in reservoir engineering, production and drilling in the Gulf Coast area (Houston, Van, Lafayette and Houma). From 1975 to 1979, Dr. Ohnimus was Assistant Professor of Petroleum Engineering at the University of Southwest Louisiana (now University of Southern Louisiana) where he taught eleven undergraduate and graduate night classes. In 1980, he taught drilling seminars at the University of Texas Petroleum Extension Service of the International Association of Drilling Contractors (“IADC”). Dr. Ohnimus has authored several published papers concerning reservoir recompletion and increased recovery. He received his Bachelor of Science degree in Chemical Engineering from the University of Missouri at Rolla in 1968, a Master of Science degree in Petroleum Engineering from the University of Missouri at Rolla in 1969 and a PhD degree in Petroleum Engineering from the University of Missouri at Rolla in 1971. Dr. Ohnimus served as a director of the American Petroleum Institute in 1978 and 1979, served as Session Chairman for the Society of Petroleum Engineers’ Annual Convention in 1982, was the Evangeline Section Chairman of the Society of Petroleum Engineers in 1978 and 1979 and served as President of the Unocal Credit Union from 1986 to 1988. In 2007, he was elected President of the Unocal Gulf Coast Alumni Club, which reports through the Chevron Retirees Association, for which Dr. Ohnimus is a director. Effective July 2015, Dr. Ohnimus assumed the position of South Texas Area Vice President of the Chevron Retirees Association. From 2008 to 2009, Dr. Ohnimus served as the vice chairman of the advisory board of Western Standard Energy Corp. (OTCBB: WSEG), an oil and natural gas exploration company. Due to his long oil and natural gas industry career and significant operational and international experience, Dr. Ohnimus provides valuable insight to our Board on our drilling and completion operations and management, as well as providing a global technology and operations perspective.
Vote Required
To be elected as a director, each director nominee must receive a pluralitymajority of the votes cast by the shareholdersholders of shares present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting is required for the election of directors.each nominee for director. With respect to the election of directors in an uncontested election, such as that being held at the Annual Meeting, “majority of the votes cast” means the number of votes cast “for” such nominee exceeds the number of votes cast “against” such nominee. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.
quorum. The Board of Directors recommends that you vote FOR each of the nominees.
18Matador Resources Company | 2024 Proxy Statement
PROPOSAL 1
Directors Continuing in Office
Biographical information for our directors who are continuing in office is provided below.
Mr. Reynald A. Baribault. Mr. Baribault, age 52, was elected to our Board in June 2014 and currently serves as the chair of the Board’s Operations and Engineering Committee. He is Vice President / Engineering of North Plains Energy, LLC, a Denver-based exploration and production operator he co-founded in 2007. North Plains Energy’s operations are solely focused on the Bakken play in North Dakota. In addition, he co-founded and serves as President and Chief Executive Officer of IPR Energy Partners, LLC, a Dallas-based oil and natural gas production operator with past operations in Louisiana, Southeast New Mexico and North Central Texas and current operations in the Fort Worth Basin. Prior to co-founding North Plains Energy and IPR Energy Partners, Mr. Baribault served as Vice President, Supervisor and Petroleum Engineering Consultant of Netherland, Sewell & Associates, Inc. from 1990 to 2002. Mr. Baribault began his professional career with Exxon Company in 1985 and oversaw operations reservoir engineering matters for high-pressure natural gas fields in South Louisiana. Mr. Baribault received his Bachelor of Science degree in Petroleum Engineering from Louisiana State University in 1985 and is a registered Petroleum Engineer in the State of Texas. Mr. Baribault provides valuable insight to our Board on our drilling, completion and reservoir engineering operations.
Mr. Joseph Wm. Foran.
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MR. JOSEPH WM. FORAN | Chairman and CEO, Matador Resources Company | Class III |
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| Biographical Information: | |
Mr. Foran age 63, founded Matador Resources Company in July 2003 and since our founding has served as Chairman of the Board and Chief Executive Officer and, through March 31, 2022, Secretary. He is also chair of the Board’s Executive Committee. Mr. Foran began his career as an oil and natural gas independent in 1983 when he and his wife, Nancy, founded Foran Oil Company with $270,000 in contributed capital from 17 of his closest friends and neighbors. Foran Oil Company was later contributed into Matador Petroleum Corporation upon its formation by Mr. Foran in 1988, and Mr. Foran served as Chairman and Chief Executive Officer of that company from inception until the time of its sale to Tom Brown, Inc. in June 2003 for an enterprise value of $388 million in an all-cash transaction on a Friday. On the following Monday, Mr. Foran founded Matador Resources Company (Matador II). Today, Matador is one of the top 20 public exploration and production companies in the country by market capitalization and one of the top 10 oil and natural gas producers in New Mexico. Mr. Foran is originally from Amarillo, Texas, where his family owned a pipeline construction business. From 1980 to 1983, he was Vice President and General Counsel of J. Cleo Thompson and James Cleo Thompson, Jr., Oil Producers, a large independent producer. Prior to that time, he was a briefing attorney to Chief Justice Joe R. Greenhill of the Supreme Court of Texas. Mr. Foran graduated with a Bachelor of Science degree in Accounting from the University of Kentucky with highest honors and a law degree from the Southern Methodist University Dedman School of Law, where he was a Hatton W. Sumners scholar and the Leading Articles Editor on the Southwestern Law Review. He is currently active as a member of various industry and civic organizations, including his church and various youth activities. In 2002, Mr. Foran was honored as the Ernst & Young “Entrepreneur of the Year” for the Southwest Region. In 2015, he was inducted into the University of Kentucky Gatton College of Business and Economics Hall of Fame. In 2019, Mr. Foran received the SMU Dedman School of Law Distinguished Alumni Award for Corporate Service and was named D CEO Magazine’s 2019 Upstream CEO of the Year. In 2020, he was inducted into the Philosophical Society of Texas. He was also named to Institutional Investors’ All-American Executive Team as one of the top chief executive officers in the Small Cap Energy Division in 2021. |
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| Chairman of the Board |
Director since: 2003 |
Independent: No |
Age: 71 |
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•Executive (Chair) |
•Capital Markets and Finance |
•Operations and Engineering |
•Prospect |
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| Qualifications: |
| As the founder, Chairman of the Board and Chief Executive Officer of Matador Resources Company, Mr. Foran provides Board leadership, industry experience and long relationships with many of our shareholders. |
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19Matador Resources Company in July 2003 and has served as Chairman of the Board, Chief Executive Officer and Secretary since our founding. He served as President from our founding until November 2013 and is also chair of the Board’s Executive Committee. Mr. Foran began his career as an oil and natural gas independent in 1983 when he and his wife, Nancy, founded Foran Oil Company with $270,000 in contributed capital from 17 of his closest friends and neighbors. Foran Oil Company was later contributed into Matador Petroleum Corporation upon its formation by Mr. Foran in 1988, and Mr. Foran served as Chairman and Chief Executive Officer of that company from inception until the time of its sale to Tom Brown, Inc. in June 2003 for an enterprise value of $388 million in an all-cash transaction. Under Mr. Foran’s guidance, Matador Petroleum realized a 21% average annual rate of return for its shareholders for 15 years. Mr. Foran is originally from Amarillo, Texas, where his family owned a pipeline construction business. From 1980 to 1983, he was Vice President and General Counsel of J. Cleo Thompson and James Cleo Thompson, Jr., Oil Producers. Prior to that time, he was a briefing attorney to Chief Justice Joe R. Greenhill of the Supreme Court of Texas. Mr. Foran graduated with a Bachelor of Science degree in Accounting from the University of Kentucky with highest honors and a law degree from the Southern Methodist University Dedman School of Law, where he was a Hatton W. Sumners scholar and the Leading Articles Editor of the Southwestern Law Review. He is currently active as a member of various industry and civic organizations, including his church and various youth activities. In 2002, Mr. Foran was honored as the Ernst & Young “Entrepreneur of the Year” for the Southwest Region. As the founder, Chairman of the Board and Chief Executive| 2024 Proxy Statement
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MS. SHELLEY F. APPEL | Former Senior Investors Relations Officer and Mergers & Acquisitions Manager, Royal Dutch Shell PLC | Class II |
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| Biographical Information: | |
| Ms. Appel was appointed to the Board in 2023 after serving as a Special Advisor to the Board since October 2022. Since January 2021, Ms. Appel has also served as Matador’s Environmental, Social and Governance (“ESG”) Coordinator. As ESG Coordinator, Ms. Appel is the primary author of the Company’s annual sustainability report. Following her graduation from business school at the University of Chicago, Ms. Appel joined Royal Dutch Shell PLC in August 2017 in the Mergers & Acquisitions group, where she served as a manager with responsibility for financial analysis—including valuation, structuring, negotiation and due diligence—for over $18 billion of acquisition and divestment opportunities. In December 2019, Ms. Appel was promoted to Senior Investor Relations Officer. In this role, Ms. Appel had responsibility for Shell’s global Upstream business narrative. She also served as an authorized spokesperson for Shell at investor meetings and conferences and managed relationships with North America based investors and research analysts. Following graduation from Yale and prior to attending the University of Chicago, Ms. Appel began her career at the parent company of the New York Stock Exchange, NYSE Euronext, as a business analyst in its Corporate Strategy group. She participated in the evaluation and implementation of its $11 billion merger with the Intercontinental Exchange Group and continued in the Corporate Strategy group of the combined company until June 2015. Ms. Appel holds a Bachelor of Arts degree, with honors, in Cognitive Science from Yale University and a Master of Business Administration degree from the Booth School of Business (University of Chicago). Ms. Appel served as Co-Chair of the Energy Group while attending the University of Chicago. |
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| Director |
Director since: 2023 |
Independent: No |
Age: 34 |
| Committees: |
•Capital Markets and Finance |
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| Ms. Appel’s extensive knowledge and experience with the Company’s Environmental, Social and Governance initiatives and investor relations experience provides the Board valuable insight and leadership on these matters. |
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20Matador Resources Company Mr. Foran has provided leadership, experience and long relationships with many of our shareholders.Mr. David M. Laney. Mr. Laney, age 67, is an original shareholder|
2024 Proxy Statement
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MR. REYNALD A. BARIBAULT | President and CEO, IPR Energy Partners LLC | Class III |
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| Biographical Information: | |
| Mr. Baribault was elected to the Board in 2014 and is chair of the Board’s Operations and Engineering Committee and Prospect Committee. He served as lead independent director of the Board from 2016 to 2019. In 2007, he co-founded North Plains Energy, LLC, which operated in the North Dakota Williston Basin, and served as its Vice President until the successful sale of its assets in 2012. In 2014, Mr. Baribault helped co-found NP Resources, LLC, which also operated in the North Dakota Williston Basin, and served as its Executive Vice President / Engineering, helping oversee the sale of its assets in late 2021. In addition, he co-founded and serves as President and Chief Executive Officer of IPR Energy Partners, LLC, a Plano, Texas-based oil and natural gas production operator with current operations in the Fort Worth Basin. Prior to co-founding North Plains Energy, NP Resources and IPR Energy Partners, Mr. Baribault served as Vice President, Supervisor and Petroleum Engineering Consultant with Netherland, Sewell & Associates, Inc. in their Dallas office from 1990 to 2002. Mr. Baribault began his professional career as a reservoir engineer with Exxon Company in 1985 in the New Orleans Eastern Division Office. Mr. Baribault received his Bachelor of Science degree in Petroleum Engineering from Louisiana State University in 1985 and is a Licensed Professional Engineer in the State of Texas. |
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| Director |
Director since: 2014 |
Independent: Yes |
Age: 60 |
| Committees: |
•Operations and Engineering (Chair) |
•Prospect (Chair) |
•Audit |
•Executive | Qualifications: |
•Nominating | Mr. Baribault provides valuable insight to our Board on our drilling, completions, production and reservoir engineering operations, as well as growth strategies, midstream operations and administration. |
•Strategic Planning and Compensation |
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21Matador Resources Company and was an original shareholder in Matador Petroleum Corporation.| 2024 Proxy Statement
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MR. R. GAINES BATY | CEO, R. Gaines Baty Associates, Inc. | Class II |
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| Biographical Information: | |
Mr. Baty was appointed to the Board in 2016. He was one of the original directors on our Board and currently serves as deputy lead independent director and chair of the Board’s Nominating, Compensation and Planning Committee. He is an attorney who since March 2007 has practiced law as a solo practitioner. Between 2003 and 2007, he was a partner with the law firm of Jackson Walker LLP in Dallas where he practiced in the area of corporate and financial law. Prior to joining Jackson Walker, Mr. Laney practiced at the law firm of Jenkens & Gilchrist from 1977 to 2003 and was Managing Partner of Jenkens & Gilchrist from 1990 to 2002. Mr. Laney has also served in several capacities as an appointee of Texas Governors William Clements and George W. Bush on state boards continuously from 1989 to 2001. He was Governor Clements’ appointee to the Texas Finance Commission, responsible for regulatory oversight of state chartered banking and thrift institutions from 1989 to 1995. He served as Governor Bush’s Texas Commissioner of Transportation (Chair of the Texas Transportation Commission) from 1995 to 2001. In 2002, Mr. Laney was nominated by President George W. Bush to the board of directors of Amtrak and confirmed by the U.S. Senate for a five-year term. In 2007, he completed his term asChairman of Amtrak’s board of directors. From 1998 to 2003, Mr. Laney served as a member of the Stanford University Board of Trustees, and for two years as chair of its audit committee. Mr. Laney currently serves on boards overseeing the development and operation of major transportation projects and serves as a director or an advisor to various transportation initiatives. He has also served in various capacities in connection with numerous civic and educational organizations and projects in the Dallas area. Mr. Laney graduated with a Bachelor of Arts degree with honors from Stanford University and a law degree from the Southern Methodist University Dedman School of Law. Mr. Laney’s legal and leadership experience in government and the private sector provide our Board with additional perspective on matters of corporate governance, legal and governmental relations as well as general business issues.
Mr. Carlos M. Sepulveda, Jr. Mr. Sepulveda, age 58, joined our Board in April 2013 and currently serves as chair of the Board’s Audit Committee and Financial Committee. Since 2010, Mr. Sepulveda has been Chairman of Triumph Bancorp, Inc. (NASDAQ: TBK) a financial holding company with interests in wholesale and community banking, specialty finance and investment management. He also serves as Chairman of TBK Bank, SSB, which is owned and operated by Triumph Bancorp. Mr. Sepulveda served as President and Chief Executive Officer of Interstate Battery System International, Inc. from March 2004 until his retirement in May 2013. He served as Executive Vice President of Interstate Batteries from 1993 to 2004 and Chief Financial Officer from 1990 to 1995. He remains a member of the Interstate Batteries board of directors, a position he has held since 1995. He has also served since 2007 on the board of directors of Cinemark Holdings, Inc. (NYSE: CNK), a company that owns and manages movie theaters, and is chair of its audit committee. In March 2014, Mr. Sepulveda became a member of the board of directors of Savoya LLC, an industry-leading provider of chauffeured ground transportation services. From 1979 to 1990, Mr. Sepulveda was with KPMG Peat Marwick and was a partner in its audit department from July 1989 to October 1990. Mr. Sepulveda received his Bachelor of Business Administration degree in accounting from the University of Texas in 1979 and is a licensed Certified Public Accountant. Mr. Sepulveda’s experience as President and Chief Executive Officer of Interstate Batteries along with his extensive public accounting background provide the Board invaluable executive leadership and financial and accounting expertise. As a certified public accountant with proven management skills, Mr. Sepulveda brings to the Board strong accounting and financial oversight coupled with experience in enterprise and operational risk management.
Ms. Margaret B. Shannon. Ms. Shannon, age 66, joined our Board in June 2011 and currently serves as chair of the Board’s Corporate Governance Committee. She served as Vice President and General Counsel of BJ Services Company, an international oilfield services company, from 1994 to 2010, when Baker Hughes Incorporated acquired BJ Services. Prior to 1994, she was a partner with the law firm of Andrews Kurth LLP. Ms. Shannon has served on the board of directors of Quanta Services Inc. (NYSE: PWR), a Houston-based public company that provides specialized infrastructure contracting services for the electric power, natural gas and pipeline and telecommunication industries, since December 2012. Ms. Shannon is also active in community activities, currently serving as a member of the board of directors of the Houston Health Foundation. She previously served as chair of the Executive Women’s Partnership sponsored by the Greater Houston Partnership, chair of the audit committee of the board of directors of the South Texas College of Law, chair of the Endowment Board of Palmer Memorial Episcopal Church and the board chair of the Harris County Health Alliance. Ms. Shannon received her J.D. cum laude from the Southern Methodist University Dedman School of Law in 1976 and her Bachelor of Arts degree from Baylor University in 1971. Ms. Shannon’s experience as an attorney, as a partner with Andrews Kurth LLP, as general counsel for a public company for more than 15 years and as a director for numerous other organizations provides our Board with important insights into public company obligations, corporate governance and board functions.
Mr. George M. Yates. Mr. Yates, age 69, joined our Board in April 2015 in accordance with the terms of the HEYCO Merger. See “Transactions with Related Persons” below. He is Chairman and Chief Executive Officer of HEYCO Energy Group, Inc., an oil and natural gas exploration and production business based in Dallas with additional offices in Roswell, New Mexico. HEYCO Energy Group, Inc. was the sole shareholder of Harvey E. Yates Company prior to the HEYCO Merger. Mr. Yates is a New Mexico native and graduated from the New
Mexico Military Institute in Roswell in 1964 and from the University of Texas at Austin with a Bachelor of Business Administration Degree in January 1969. He is also a graduate of the Owners/Presidents Management Program at Harvard Business School. He has been President of the New Mexico Landmen’s Association and the Independent Petroleum Association of New Mexico. He is past Chairman of the Board of Directors of Mountain States Legal Foundation of Denver, Colorado and the Environmental Issues Council based in Washington, D.C. He is also past Chairman of the Independent Petroleum Association of America and the Natural Gas Council. He served as Chairman of the board of directors of the Business and Industrial Political Action Committee (BIPAC) based in Washington, D.C. and as President of the Twenty-Five Year Club of the Petroleum Industry. He is currently a member of the National Petroleum Council. In 2004, Mr. Yates received the prestigious “Roughneck of the Year” award sponsored by Lone Star Steel Company. He was inducted into the Rocky Mountain Oil and Gas Hall of Fame in 2009. As a proven oil and natural gas executive, Mr. Yates provides our Board with decades of experience and tremendous knowledge with respect to the Delaware Basin and the assets acquired by Matador in the HEYCO Merger.
Special Board Advisors
In addition to our Board, we have nine individuals with significant oil and natural gas experience or legal, accounting or other business experience who will advise our Board on various matters. From time to time, we enter into various agreements with these individuals with respect to their service as special advisors to our Board, as well as indemnification agreements in form similar to those entered into with our directors and officers. Their business histories are described below:
Mr. Ronald F. Coleman.Mr. Coleman retired in 2014 from his joint role at Archer Limited as Executive Vice President and President — North America. Mr. Coleman had joined the global oil services company in 2012 and was responsible for the integration of multiple product service lines as part of a significant geographic expansion for Archer. He had previously served as Chief Operating Officer and Executive Vice-President of Select Energy Services, a position he held from January 2011 to December 2011. He joined Select Energy following 33 years with BJ Services Company, where he held various roles including Vice President — North America Pumping from 2007 to 2010 and Vice President — Operations (United States and Mexico) from 1998 to 2007. Mr. Coleman received a Bachelor of Business Administration degree from the University of Texas Permian Basin in 1993.
Mr. Marlan W. Downey. Mr. Downey worked for Shell Oil Company, an integrated energy company, from 1957 to 1987. In 1977, he moved to Shell Oil’s International Exploration & Production business and became Vice President of Shell, and then President of Shell Oil’s newly-formed international subsidiary, Pecten International, retiring in 1987. Mr. Downey joined ARCO International in 1990 as Senior Vice President of Exploration, becoming President of ARCO International and then Senior Vice President and Executive Exploration Advisor to ARCO. Mr. Downey retired from ARCO in 1996. He serves on the board of TransAtlantic Petroleum Ltd., an international oil and natural gas company. Mr. Downey is a founder and director of Foundation Energy, a company that purchases and operates producing oil and natural gas properties. He is a fellow of the American Association for the Advancement of Science. He is an elected fellow of the Geological Society in London. Mr. Downey is past President of the American Association of Petroleum Geologists (“AAPG”) and has served as Bartell Professor and Chief Scientist — Sarkeys Energy Center at the University of Oklahoma. Mr. Downey is the 2009 recipient of the AAPG’s Sidney Powers Medal, which is the highest honor awarded by the AAPG. He is active in several scientific organizations and serves on the board of Berkeley Earth, a non-profit organization. Mr. Downey received a Bachelor of Arts degree in Chemistry in 1952 at Peru State College in Nebraska. He served in the U.S. Army in Korea and the Philippines, then enrolled at the University of Nebraska, and received a Bachelor of Science degree in 1956 and a Master of Science degree in Geology in 1957. Mr. Downey previously served on Matador Petroleum Corporation’s board of directors. He has served as a special advisor to the Board since our inception in July 2003 and currently serves as chair of the Board’s Prospect Committee.
Mr. John R. Gass.Mr. Gass is Senior Vice President, Eastern Hemisphere Operations, for Nabors Drilling International Limited in Dubai, United Arab Emirates. Mr. Gass joined Nabors in its Houston, Texas office in 2004 as Senior Vice President, Business Development and Contracts, and held that position until 2011 when he was transferred to Dubai. Prior to joining Nabors, Mr. Gass served as Vice President, Global Operations at Parker Drilling Company. He spent 28 years with Parker and has extensive experience in drilling operations worldwide, including Latin America, the Middle East, Europe, Africa, the former Soviet Union and the Far East. Mr. Gass received a Bachelor of Business Administration degree from the University of Oklahoma in 1974 and a Master of Business Administration degree in international management from the Thunderbird Graduate School of International Management in Glendale, Arizona.
Mr. Wade I. Massad. Mr. Massad served as a consultant to the Company and a special advisor to the Board from 2010 to December 2011, when he was elected Executive Vice President — Capital Markets of the Company. He held that role until July 2012, when he resumed his role as a consultant to the Company and as a special advisor to the Board, pursuant to a consulting agreement entered into in August 2012. Mr. Massad is the Co-Founder and Co-Managing Member of Cleveland Capital Management L.L.C., a registered investment advisor and General Partner of Cleveland Capital L.P., a private investment fund focused on micro-cap public and private equity securities, established in October 1996. Previously, Mr. Massad was an investment banker with Keybanc Capital Markets and RBC Capital Markets, where he was the head of U.S. equity institutional sales from 1997 to 1998 and the head of U.S. Capital Markets business from 1999 to 2003. He also served on the firm’s executive committee. Mr. Massad has served on multiple public and private company boards. Mr. Massad received a Bachelor of Arts in business management from Baldwin-Wallace University in 1989 and currently serves on its Board of Trustees.
Mr. Greg L. McMichael. Mr. McMichael served as a member of the Board of the Board’s Strategic Planning and Compensation Committee, Nominating Committee and Shareholder Advisory Committee for Board Nominations. Mr. Baty is CEO of R. Gaines Baty Associates, Inc., a leading executive search firm he founded in 1982 after working with the IBM Corporation. With over 30 years of experience, Mr. Baty has provided companies across the country and in a variety of industries with executive search and advisory services. Mr. Baty has served as a two-term President of the Society of Executive Recruiting Consultants and a two-term President of the Independent Recruiter Group. Mr. Baty is also a published author. Mr. Baty received a Bachelor of Business Administration degree from Texas Tech University, where he was a football team letterman, captain and, later, graduate assistant coach.
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| Deputy Lead Independent Director |
Director since: 2016 |
Independent: Yes |
Age: 73 | | |
| Committees: | | |
•Strategic Planning and Compensation (Chair) | | |
•Nominating (Chair) | Qualifications: |
•Executive | Mr. Baty’s experience and expertise in executive leadership and development provide our Board with an important and unique perspective on these matters, and Mr. Baty assists the Board and the Company with recruitment, board administration, compensation and growth strategies. |
•Environmental, Social and Corporate Governance |
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22Matador Resources Company from 2004 to 2008. He presently serves on the board of directors for Denbury Resources, Inc. (NYSE: DNR). Mr. McMichael retired in October 2004 as Vice President and Group Leader — Energy Research, of A.G. Edwards. In that capacity, he was responsible for overseeing all of the firm’s equity research in the Energy Sector, including the integrated oils, exploration and production, oil service and master limited partnerships. Prior to joining A.G. Edwards, Mr. McMichael served as Managing Director of Equity Research at Hanifen, Imhoff, Inc., a Denver-based regional investment firm. He had previously served as Chief Executive Officer of a private oil and natural gas acquisition and production company he co-founded in 1987. Mr. McMichael is a member of the National Association of Corporate Directors, where he is currently a Leadership Fellow and serves on the board of the Colorado chapter. Mr. McMichael received a Bachelor of Arts degree in Political Science and Economics from Schiller International University (London) in 1973.Mr. David F. Nicklin. Mr. Nicklin joined |
2024 Proxy Statement
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MR. JAMES M. HOWARD | Retired Trustee, Private Family Trust | Class II |
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| Biographical Information: | |
| Mr. Howard was appointed to the Board in 2021 and is co-chair of the Board’s Marketing and Midstream Committee. He retired in March 2020 from his long-time role as a trustee of a private family trust in Houston, Texas where, since 1999, he exercised sole responsibility for all trust assets and actions. The trust was comprised of over 40 privately held limited partnerships, limited liability companies and public market positions in various asset classes and sectors. From 2000 to 2020, Mr. Howard also served as trustee of a private secondary trust with a different mix of assets than the primary family trust. Prior to his work as a trustee, he served as Vice President of Texon, L.P. from 1996 to 2000, marketing all crude oil, condensate and liquefied petroleum gas for the company and its public utility joint venture partner. From 1986 to 1996, he served as Vice President of Tripetrol Oil Trading, Inc., through which he also served on the New York Mercantile Exchange (NYMEX) Crude Oil Advisory Committee. Mr. Howard previously served in other trading positions at various Houston-based trading and petroleum companies from 1975 to 1986. He received a Bachelor of Arts degree from Florida Presbyterian College and a Master of International Management degree from Thunderbird School of International Management. |
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| Director |
Director since: 2021 |
Independent: Yes |
Age: 73 |
| Committees: |
•Marketing and Midstream (Co-Chair) |
•Audit |
•Capital Markets and Finance | Qualifications: |
•Environmental, Social and Corporate Governance | Mr. Howard’s petroleum marketing and trading experience provide the Company with valuable insight, particularly with respect to its marketing activities and the Company's midstream operations. |
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23Matador Resources Company in February 2009 as Executive Director of Exploration after working with the Company as a consultant since November 2007. He retired from his position as Executive Director of Exploration on March 31, 2015 but continues to serve the Company as a consultant and special advisor to the Board. From January 2000 until he joined Matador in 2009, Mr. Nicklin provided executive level consulting services to a variety of clients. In 2006, Mr. Nicklin co-founded and currently leads a small, private oil and natural gas company, Salt Creek Petroleum LLC. Salt Creek Petroleum owns small, non-operated interests in a variety of onshore oil and natural gas fields in the United States. In 2000, Mr. Nicklin founded and led for three years a private oil and natural gas exploration company, Serica Energy, which is now a public company with assets in Indonesia, the United Kingdom, Spain, Ireland and Morocco. Between 1981 and 2000, Mr. Nicklin| 2024 Proxy Statement
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MR. TIMOTHY E. PARKER | Former Portfolio Manager and Analyst—Natural Resources, T. Rowe Price & Associates | Class III |
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| Biographical Information: | |
Mr. Parker was an employee of ARCO, where he participated in and led several international exploration teams, particularly in the Middle East, southeast Asia and Australasia. In 1991, he became the Chief Geologist for ARCO, a position he held until his retirement in 2000. In this position, Mr. Nicklin was responsible for the quality of the geological effort at ARCO, in particular, ensuring the application of state-of-the-art geological technology, the company’s risk management process, the selection of new ventures and the high-grading of a large geoscience staff. Throughout his career at ARCO, Mr. Nicklin was closely involved with the successful exploration for and development of a number of large oil and natural gas discoveries. Prior to joining ARCO, Mr. Nicklin was a senior development and operations geologist in a varietyof positions in the United Kingdom, Angola, Norway and the Middle East. He was a specialist in well-site operations and provided training in operations to entry-level personnel. Mr. Nicklin was born in the United Kingdom and received a Bachelor of Science degree in Geology from the University of Wales in 1971. He is an active member of the AAPG and various other professional groups.
Dr. James D. Robertson. Dr. Robertson is a founder and co-managing partner of Salt Creek Petroleum, LLC, a privately-held company that explores for and produces oil and natural gas in conventional onshore plays in Texas. He is also founder and owner of Rannoch Petroleum LLC, an oil and natural gas investment and consulting firm based in Fort Worth, Texas. Prior to becoming an independent petroleum explorer, Dr. Robertson worked for ARCO for 25 years, serving as Vice President of Exploration for ARCO’s international division prior to his retirement from ARCO upon its acquisition by BP plc in 2000. Dr. Robertson has served as president of the Society of Exploration Geophysicists (SEG), chairman of the Fort Worth Chapter of the Society of Independent Professional Earth Scientists (SIPES) and as a national director of SIPES from 2012 to 2013. He is a licensed professional geoscientist in the State of Texas. Dr. Robertson received a Bachelor of Science degree in geological engineering from Princeton University and a PhD in geophysics from the University of Wisconsin.
Mr. James A. Rolfe. Mr. Rolfe is Of Counsel with Kendall Law Group, a Dallas, Texas law firm specializing in litigation that he joined in 2009. From 2005 to 2009, Mr. Rolfe served as Of Counsel with Fitzpatrick Hagood Smith & Uhl LLP, a boutique litigation firm. He worked as a sole practitioner in private practice from 1985 to 2005. From 1981 to 1985, Mr. Rolfe served as United States Attorney for the Northern District of Texas, having been appointed to that position by President Reagan. From 1979 to 1981, he worked in private practice following his service as Assistant United States Attorney for the Northern District of Texas, a position he held from 1973 to 1979. Mr. Rolfe was Assistant District Attorney for Dallas County from 1969 to 1973. He began his public service in the role of Assistant City Attorney for the City of Dallas, which position he held from 1968 to 1969. Mr. Rolfe served in the United States Army from 1959 to 1962. He received a Bachelor of Arts degree from Austin College in 1965 and received its Distinguished Alumnus Award in 2000. He received his law degree from the University of Texas at Austin in 1968.
Mr. Michael C. Ryan. Mr. Ryan served as a member of the Board in 2018, serves as lead independent director and is chair of the Board’s Capital Markets and Finance Committee. Mr. Parker currently serves as a contractor in charge of research for Brightworks Wealth Management, LLC. Mr. Parker retired in 2017 as Portfolio Manager and Analyst—Natural Resources for T. Rowe Price & Associates. Mr. Parker joined T. Rowe Price in 2001 as an equity analyst before becoming a portfolio manager in 2010. He managed the New Era fund from 2010 to 2013 and managed the energy and natural resources portions of T. Rowe Price’s Small Cap Value, Small Cap Stock and New Horizons funds from 2013 to 2017. Prior to joining T. Rowe Price, Mr. Parker was an investment banking analyst at Robert W. Baird & Co., Inc. Mr. Parker holds a Bachelor of Science degree in Commerce from the University of Virginia and a Master of Business Administration degree from the Darden School of Graduate Business (University of Virginia).
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| Lead Independent Director |
Director since: 2018 |
Independent: Yes |
Age: 49 |
| Committees: |
•Capital Markets and Finance (Chair) |
•Audit |
•Environmental, Social and Corporate Governance |
•Executive | Qualifications: |
•Nominating | Mr. Parker’s experience with a large institutional shareholder and his extensive familiarity with the oil and natural gas industry and capital markets provide the Company with valuable insight. |
•Prospect |
•Strategic Planning and Compensation |
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24Matador Resources Company from February 2009 to June 2015. Prior to joining the Board, he served as an advisor to the Financial Committee and frequently participated in Board planning and strategy sessions. Mr. Ryan is a private investor. From October 2004 to December 2015, he was a Partner and member of the Investment Committee at Berens Capital Management LLC, an investment firm based in New York. From February 1998 to June 2004, he worked with Goldman, Sachs & Co., a global investment banking and securities services firm, leading its West Coast international institutional equities business. In this role, he developed and built a team of professionals to advise large institutional clients on their global investment decisions. From 1995 to 1998, Mr. Ryan lived in Oslo, Norway, where he was a Partner at Pareto Securities, a Scandinavian-based securities firm where he led and built the institutional equities business into the United States and United Kingdom. From 1991 to 1994, Mr. Ryan represented multiple eastern European governments in the preparation, negotiation and sale of many of their largest state-owned companies. He began his career with Honeywell, Inc., which invents and manufactures technologies, including in the safety, security and energy areas, in 1983, working in the Systems and Research Center, which focused on advanced weapons development programs. Mr. Ryan received a Master of Business Administration degree from The Wharton School at the University of Pennsylvania in 1991 and a Bachelor of Science degree from the University of Minnesota in 1983.|
2024 Proxy Statement
CORPORATE GOVERNANCE
The business affairs of Matador are managed under the direction of the Board in accordance with the Texas Business Organizations Code, the Company’s Amended and Restated Certificate of Formation
(the “Certificate of Formation”) and its Amended and Restated Bylaws
(the “Bylaws”), each as amended to date. The Board has adopted Corporate Governance Guidelines, which are reviewed annually by the
Environmental, Social and Corporate Governance Committee of the Board. The Company has a Code of Ethics and Business Conduct for Officers, Directors and Employees (“Code of Ethics”), which is applicable to all officers, directors and employees of the Company. The Company intends to post any amendments to, and may post any waivers of, its Code of Ethics on the Company’s website to the extent applicable to an executive officer or a director of the Company. The Corporate Governance Guidelines and the Code of Ethics are available on the Company’s website at
www.matadorresources.com under the heading
“Investors — “Investor Relations—Corporate Governance.”
The Board holds regular and special meetings and spends such time on the affairs of the Company as its duties require. During
2015,2023, the Board held
15eight meetings. The Board also meets regularly in non-management executive sessions in accordance with NYSE regulations. The Corporate Governance Guidelines provide that one of the Company’s independent directors should serve as lead independent director at any time when the chief executive officer serves as the chairman of the board. The lead independent director presides over
executive sessions of the non-management
executive sessions,directors and the independent members of the Board (the “Independent Board”), serves as a liaison between the chairman and the independent directors and performs such additional duties as the Board may otherwise determine and delegate. Because Mr. Foran serves as Chairman of the Board and Chief Executive Officer, our independent directors have appointed Mr.
LaneyParker to serve as lead independent
director and Mr. Baty to serve as deputy lead independent director. In
2015,2023, all incumbent directors of the Company attended at least 75% of the meetings of the Board and the committees on which they
served, other than Mr. Yates who did not join the Board until April 28, 2015 and attended six of nine board meetings, including all three of the regularly scheduled meetings, following his appointment to the Board. Our Companyserved. It is our policy
states that each of our directors is expected to attend
Annual Meetingsannual meetings of
Shareholders.shareholders, except if unusual circumstances make attendance impractical. All of our directors
were in attendance atattended the
20152023 Annual Meeting.
Independence of Directors
The Board makes all determinations with respect to director independence in accordance with the NYSE listing standards and the rules and regulations promulgated by the SEC. The actual determination of whether a director is independent is made by the Board on a case-by-case basis.
In connection with its preparation for the Annual Meeting, the Board undertook its annual review of director independence and considered transactions and relationships between each director or any member of his or her immediate family and the Company and its subsidiaries and affiliates. In making its determination, the Board applied the NYSE listing standards and SEC rules and regulations.
The Board reviewed the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. After this review, our Board determined that
sevennine of our
nine11 current directors are “independent directors” as defined under the rules of the SEC and the NYSE:
Ms. Shannon,Mmes. Ehrman, Rogers and Ward and Messrs. Baribault,
Laney, Mitchell, SepulvedaBaty, Byerley, Howard, Parker and
Stephenson and Dr. Ohnimus. Mr. Stephenson’s term will expire at the Annual Meeting, creating a vacancy on the Board. If Mr. Burkert is elected at the Annual Meeting, the Board has determined that he will be an “independent director” as defined under the rules of the SEC and the NYSE.Stewart. No member of
or nominee for our Board
other than Ms. Appel and Mr. Foran has a family relationship with any executive officer or other members of our Board.
25Matador Resources Company | 2024 Proxy Statement
Majority Vote in Director Elections
On December 21, 2016, the Board amended the Bylaws to implement a majority voting standard in uncontested director elections. Pursuant to the Bylaws, in an election of directors at a meeting of shareholders at which a quorum is present,
(i) if the number of nominees exceeds the number of directors to be elected (a “contested election”), directors shall be elected by a plurality of the votes cast by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors at such meeting and (ii) in an election of directors that is not a contested election (an “uncontested election”), such as that being held at the Annual Meeting, directors shall be elected by a majority of the votes cast by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors at such meeting. For purposes of the Bylaws, in an uncontested election, a “majority of the votes cast” means that the number of shares voted “for” a director must exceed the number of votes cast “against” that director. Prior to the amendment of the Bylaws, directors were elected by a plurality of the votes cast, whether or not the election was a contested election.
In connection with the amendment to the Bylaws, the Board approved and adopted an amendment to the Company’s Corporate Governance Guidelines to implement a resignation policy for directors who fail to receive the required number of votes in an uncontested election in accordance with the Bylaws. Pursuant to the Corporate Governance Guidelines, as amended, in an uncontested election, any nominee for director who receives a greater number of votes “against” his or her election than votes “for” such election (a “majority against vote”) shall promptly tender his or her resignation following certification of the shareholder vote.
The Nominating Committee shall promptly consider the resignation offer and a range of possible responses based on the circumstances that led to the majority against vote, if known, and make a recommendation to the Board concerning whether to accept or reject such resignation. The Board shall act on the Nominating Committee’s recommendation and publicly disclose its decision with respect to such resignation offer within 90 days following certification of the shareholder vote. The resignation, if accepted by the Board, will be effective at the time specified by the Board when it determines to accept the resignation, which effective time may be deferred until a replacement director is identified and appointed to the Board.
Board Leadership Structure
Mr. Foran serves as Chairman of the Board and Chief Executive Officer of the Company. As stated in the Corporate Governance Guidelines, the Board does not believe that the offices of Chairman of the Board and
Chief Executive Officer must be separate. The members of the Board possess experience and unique knowledge of the challenges and opportunities the Company faces. They are, therefore, in the best position to evaluate the current and future needs of the Company and to judge how the capabilities of the directors and senior managers can be most effectively organized to meet those needs. Given hisMr. Foran’s deep knowledge of the Company and experience in leading it, the Board currently believes that the most effective leadership structure for the Company is to have Mr. Foran serve as Chairman of the Board and Chief Executive Officer.
While Mr. Foran serves as Chairman and Chief Executive Officer, seven of eight
Nine of our
non-employee11 directors are independent under the rules of the SEC and the NYSE. After considering the recommendations of our
Nominating,Strategic Planning and Compensation
and Planning Committee, the independent directors determine Mr. Foran’s compensation. Further, the Company has
fourfive standing committees,
a lead independent director (Mr. Parker) and
ana deputy lead independent
lead director.director (Mr. Baty). The Board believes that each of these measures counterbalances any risk that may exist in having Mr. Foran serve as Chairman
of the Board and Chief Executive Officer. For these reasons, the Board believes that this leadership structure is effective for the Company.
26Matador Resources Company | 2024 Proxy Statement
As
the Lead Director,lead independent director, Mr.
LaneyParker has the following roles and responsibilities:
•chairs the executive sessions of the non-management and independent directors;
•leads the independent directors in the evaluation of the Chief Executive Officer;
•facilitates communication among the non-management and independent directors; and
•acts as a liaison between the non-management and independent directors and the Chief Executive Officer.
Mr.
Laney,Parker, as
Lead Director,lead independent director, may also perform such other duties as the Board or the
Environmental, Social and Corporate Governance Committee from time to time may assign, which may include, but are not limited to, the following:
•help develop Board agendas and ensure critical issues are included;
•determine quality, quantity and timeliness of information from management;
•make recommendations about retaining consultants or special advisors for the Board;
•interview Board candidates;
•oversee Board and director evaluations; and
•help improve communications and processes by and between management and the Board and the Chief Executive Officer.
Mr. Baty, as deputy lead independent director, may also carry out the above duties in the absence of or at the direction of Mr. Parker, as lead independent director.
27Matador Resources Company | 2024 Proxy Statement
The standing committees of the Board are the Audit
Committee; Nominating, CompensationCommittee, Environmental, Social and
Planning Committee; Corporate Governance
Committee;Committee, Executive Committee, Nominating Committee and
ExecutiveStrategic Planning and Compensation Committee. The Board has also established the following advisory committees:
Capital Markets and Finance Committee, Marketing and Midstream Committee, Operations and Engineering
Committee; Financial Committee;Committee and Prospect Committee. Each of the standing committees is governed by a charter, and a copy of the charters of each of these committees is available on the Company’s website at
www.matadorresources.com under the heading
“Investors — “Investor Relations—Corporate Governance.” Director membership of all of our standing and advisory committees at December 31, 2015 is identified below.
below, as of April 16, 2024. Ms. Rogers’ term as a director, and as a member of the committees noted below, will expire at the 2024 Annual Meeting.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Director | Audit | Environmental, Social and Corporate Governance | Executive | Nominating | Strategic Planning and Compensation | Capital Markets and Finance | Marketing and Midstream | Operations and Engineering | | | | | | Prospect |
Director
| | Audit
Committee | | Nominating,
Compensation
and Planning
Committee | | Corporate
Governance
Committee | | Executive
Committee | | Operations
and
Engineering
Committee | | Financial
Committee | | Prospect
Committee |
Joseph Wm. Foran | | | C | | | • | | • | | | | | ** | | * | | * | | *• |
Shelley F. Appel | | | | | | • | | | |
| Reynald A. Baribault | • | | • | • | *• | | | C | | | | | ** | | | | *C |
DavidR. Gaines Baty
| | • | • | C | C | | | | |
William M. LaneyByerley | C | *• | | | | | • | | ** |
| Monika U. Ehrman | | • | *• | | • | | *C | • | | | * | | • |
GregoryJames M. Howard
| • | • | | | | • | C | | |
Timothy E. MitchellParker | • | • | • | • | • | *C | | | | | | | | • |
Steven W. Ohnimus
Julia P. Forrester Rogers | • | *C | | | | • | | | | | | | * | | | | * |
CarlosKenneth L. Stewart
| | • | • | | • | • | | | |
Susan M. Sepulveda, Jr.Ward | • | **• | | | | | • | | • |
| | | | * | | | | ** | | | |
Margaret B. Shannon
C | Committee Chair | • | | * | | ** | | | | | | * | | |
Don C. Stephenson
| | * | | | | | | | | | | | | |
George M. Yates
| | | | | | | | | | * | | * | | *Committee Member |
The Audit Committee assists the Board in monitoring:
•the integrity of our financial statements and disclosures;
•our compliance with legal and regulatory requirements;
•the qualifications and independence of our independent auditor;
•the performance of our internal audit function and our independent auditor; and
•our internal control systems.
In addition, the Audit Committee is charged with
the (i) review of compliance with our Code of
Ethics.During 2015, ourEthics and (ii) oversight of the Company’s guidelines and policies to govern the process by which risk assessment and risk management are undertaken by management, including with respect to corporate governance, financial, accounting, operational, environmental, health and safety, regulatory and cybersecurity risks.
As of April 16, 2024, the Audit Committee met six times and as of December 31, 2015 consisted of Mmes. Rogers and Ward and Messrs. Laney, SepulvedaBaribault, Byerley, Howard and Stephenson and Dr. Ohnimus,Parker, each of whom is independent under the rules of the NYSESEC and the SEC.NYSE. Mr. SepulvedaByerley is the chair of the Audit Committee. SEC rules require a public company to disclose whether or not its audit committee has an “audit committee financial expert” as defined by applicable SEC rules and regulations. Our Board has determined that each of Mr. SepulvedaMs. Ward and Mr. StephensonMessrs. Byerley and Parker is an “audit committee financial expert.” Mr. Stephenson’sDuring 2023, the Audit Committee met four times.
28Matador Resources Company | 2024 Proxy Statement
Environmental, Social and Corporate Governance Committee
The Environmental, Social and Corporate Governance Committee is responsible for periodically reviewing and assessing our Corporate Governance Guidelines and Code of Ethics and making recommendations for changes thereto to the Board, reviewing any other matters related to our corporate governance, unless the authority to conduct such review has been retained by the Board or delegated to another committee, and overseeing the process for evaluation of the Board and management. The Environmental, Social and Corporate Governance Committee (formerly the Corporate Governance Committee), in conjunction with the Company’s Chief Executive Officer, also oversees and makes recommendations to the Board regarding sustainability matters relevant to the Company’s operations, including ESG-related matters.
As of April 16, 2024, the Environmental, Social and Corporate Governance Committee consisted of Mmes. Ehrman, Rogers and Ward and Messrs. Baty, Byerley, Howard, Parker and Stewart, each of whom is independent under the rules of the SEC and the NYSE. Ms. Rogers is the chair of the Environmental, Social and Corporate Governance Committee. Ms. Rogers’ term as a director, and as a member of the AuditEnvironmental, Social and Corporate Governance Committee, will expire at the 2024 Annual Meeting,Meeting. During 2023, the Environmental, Social and if elected,Corporate Governance Committee met two times.
Executive Committee
The Executive Committee has authority to discharge all the responsibilities of the Board in the management of the business and affairs of the Company, except where action of the full Board is required by statute or by our Certificate of Formation or Bylaws, each as amended to date. As of April 16, 2024, the Executive Committee consisted of Ms. Ehrman and Messrs. Foran, Baribault, Baty, Parker and Stewart. Mr.
BurkertForan is
expected to replace Mr. Stephenson on the
Auditchair of the Executive Committee.
Mr. Burkert is expected to qualify as an “audit committee financial expert.”During 2023, the Executive Committee did not meet.
Nominating
Compensation and Planning Committee
The Nominating
Compensation and Planning Committee has the following responsibilities:
•identifies and recommends to the Board individuals qualified to be nominated for election to the Board consistent with criteria approved by the Board; and
•recommends to the Board the members and chair of each committee of the Board;Board.
assists the Board and the independent members of the Board in the discharge of their fiduciary responsibilities relating
Pursuant to the fair and competitive compensation of our executive officers;
provides overall guidance with respect to the establishment, maintenance and administration of our compensation programs, including stock and benefit plans;
oversees and advises the Board and the independent members of the BoardNominating Committee charter, no director may serve on the adoption of policies that govern our compensation programs; and
recommendsNominating Committee if such director is subject to re-election to the Board at the strategic, tactical and performance goalsnext annual meeting of the Company, including those performance and tactical goals that relate to performance-based compensation, including but not limited to goals for production, reserves, cash flows and shareholder value.
shareholders.Our Nominating, Compensation and Planning Committee has the authority to delegate authority and responsibilities to subcommittees of its members, so long as the subcommittee consists of at least two members.
As of
December 31, 2015, ourApril 16, 2024, the Nominating
Compensation and Planning Committee consisted of
Ms. Shannon and Messrs.
Baty, Baribault and
Laney,Parker, each of whom is independent under the rules of the SEC and the
NYSE, a “non-employee director” pursuant to Rule 16b-3 of the Securities Exchange Act of 1934, as amended, or the “Exchange Act,” and an “outside director” pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).NYSE. Mr.
LaneyBaty is the chair of the Nominating
Compensation and Planning Committee. During
2015,2023, the Nominating
Compensation and Planning Committee met
ninefour times.
The Board has also established a Shareholder Advisory Committee for Board Nominations
(formerly the Director Nominating Advisory Committee)(the “Advisory Committee”) that is charged with receiving and considering possible nominees for election
by shareholders to the
Board.Board by shareholders. Pursuant to the
Shareholder Advisory Committee
for Board Nominations charter, this committee is comprised of eight to 12 persons selected by the Nominating
Compensation and Planning Committee and consists of at least:
•two members of the Nominating Compensation and Planning Committee;
•two former members of or special advisors to the Board;
•two shareholders who beneficially own Common Stock having a market value of at least $1.0 million (such value to be based on the market value of the Common Stock immediately prior to designation of such shareholders to the Shareholder Advisory Committee for Board Nominations)Committee); and
two shareholders who have beneficially owned Common Stock continuously for at least the five years prior to such shareholder’s designation to the Shareholder Advisory Committee for Board Nominations.
Committee.
29Matador Resources Company | 2024 Proxy Statement
The current members of the
Shareholder Advisory Committee
for Board Nominations are Messrs.
Baribault, Laney, RyanBaty and
Burkert, Dr. Ohnimus,Parker, J. Barry Banker, Joe E. Coleman,
KevinWalter Fister, Robert Garrett, David E. Lancaster, Bobby K. Pickard and George M.
Grevey, Scott E. King, James S. Kone, Jr. and James H. “Jake” Trewin.Yates. Mr. Baty is the chair of the Advisory Committee.
The
Shareholder Advisory Committee
for Board Nominations makes recommendations based on its conclusions to the Nominating
Compensation and Planning Committee for its consideration and review.
The Nominating
Compensation and Planning Committee and the
Shareholder Advisory Committee
for Board Nominations consider individuals recommended by the Company’s shareholders to serve on the
Board.Board in accordance with the advance notice provisions of the Bylaws and the applicable rules and regulations of the SEC and the NYSE. In considering candidates submitted by shareholders, the
Shareholder Advisory Committee
for Board Nominations and the Nominating
Compensation and Planning Committee take into consideration the needs of the Board and the qualifications of the candidate. To have a candidate considered by the
Shareholder Advisory Committee
for Board Nominations and the Nominating
Compensation and Planning Committee, a shareholder must submit the recommendation in writing and must include the following information:
•The name and address of the shareholder, evidence of the person’s ownership of Common Stock or derivatives, including the number of shares owned, a description of all arrangements or understandings regarding the right to vote shares of the Company, any short interest in any security of the Company, any rights to dividends that are separated or separable from the underlying shares, any proportionate interest in shares or derivatives held by a general or limited partnership whereby the shareholder is a general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and
| general partner or beneficially owns an interest in the general partner, any performance-related fees (other than an asset-based fee) that the shareholder is entitled to based on any change in the value of the shares or derivatives, any other information relating to the shareholder that would be required to be disclosed in connection with solicitations of proxies for the election of directors in a contested election and a statement whether or not the shareholder will deliver a proxy to shareholders; and
|
•The name, age and business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s consent to be a director if selected by the Nominating Compensation and Planning Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors.
The shareholder recommendation and information described above, and in more detail in our
Amended and Restated Bylaws,
as amended to date, must be sent to the Corporate Secretary at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240 and must be received by the Corporate Secretary not fewer than 45
ornor more than 75 days prior to the
one-yearone year anniversary date of the date the Company’s proxy statement was mailed in connection with the previous year’s
Annual Meetingannual meeting of
Shareholders.shareholders.
The Nominating
Compensation and Planning Committee believes that a potential director of the Company must demonstrate that such candidate has:
•relevant knowledge and a depth and diversity of background and experience at the policy-making level in business, government or education;
•a balance withof the business knowledgeinterest and experience of the incumbent or nominated directors;
•availability and willingness to devote adequate time to Board duties;
•any unfilled expertise needed on the Board or one of its committees;
•ability to make independent analytical, probing and other inquiries;
•personal qualities of leadership, character, judgment and a reputation in the community at large of integrity, trust, respect, competence and adherence to the highest ethical standards;
•willingness to exercise independent judgment yet willingnesswhile remaining willing to listen and learn from the other directors and the Company’s staff; and
•financial independence to ensure such candidate will not be financially dependent on director compensation.
In the case of an incumbent director, the Nominating
Compensation and Planning Committee will also consider such director’s past performance on the Board.
30Matador Resources Company | 2024 Proxy Statement
The Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations may identify potential nominees by asking, from time to time, current directors and executive officers for their recommendation of persons meeting the criteria described above who might be available to serve on the Board. The Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations may also engage firms that specialize in identifying director candidates. As described above, the Nominating
Compensation and Planning Committee and
Shareholder Advisory Committee
for Board Nominations will also consider candidates recommended by shareholders.
Once a person has been identified by the Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations as a potential candidate, the Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations will make an initial determination regarding the need for additional Board members to fill vacancies or expand the size of the Board. If the Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations determines that additional consideration is warranted, the Nominating
Compensation and Planning Committee or the
Shareholder Advisory Committee
for Board Nominations will review such information and conduct interviews as it deems necessary to fully evaluate each director candidate.
In addition to the qualifications of a candidate, the Nominating Compensation and Planning Committee or the Shareholder Advisory Committee for Board Nominations will consider such relevant factors as it deems appropriate, including the current composition of the Board, the evaluations of other prospective nominees and the need for any required expertise on the Board or one of its committees. The Nominating Compensation and Planning Committee or the Shareholder Advisory Committee for Board Nominations also contemplatecontemplates multiple dynamics that promote and advance diversity amongstamong the members of the Board. Although the Nominating Compensation and Planning Committee does not have a formal diversity policy, the Nominating Compensation and Planning Committee considers a number of factors regarding diversity of personal and professional backgrounds, gender, race, age, specialized skills and acumen and breadth of experience in energyoil and natural gas exploration and production, consumption, distribution or transportation, government policy,midstream and marketing, executive leadership, accounting, finance or law. The Nominating Compensation and PlanningCommittee does not discriminate based upon race, religion, gender, national origin, age, disability, citizenship or any other legally protected status. The Nominating Committee’s evaluation process will not vary based on whether or not a candidate is recommended by a shareholder.
Corporate Governance
Strategic Planning and Compensation Committee
The Corporate GovernanceStrategic Planning and Compensation Committee is responsible for periodically reviewing(the “Compensation Committee”) has the following responsibilities:
•assists the Board and assessingthe Independent Board in the discharge of their fiduciary responsibilities relating to the fair and competitive compensation of our Corporate Governance Guidelinesexecutive officers;
•provides overall guidance with respect to the establishment, maintenance and making recommendations for changes theretoadministration of our compensation programs, including stock and benefit plans;
•oversees and advises the Board and the Independent Board on the adoption of policies that govern our compensation programs;
•recommends to the Board reviewing any other matters relatedthe strategic, tactical and performance goals of the Company, including those performance and tactical goals that relate to our corporate governance, unlessperformance-based compensation, including but not limited to goals for production, reserves, cash flows and shareholder value;
•in conjunction with the Company’s CEO, oversees management succession planning; and
•produces and approves the annual Compensation Committee Report on executive compensation for inclusion in the Company’s Annual Report on Form 10-K and/or annual proxy statement in accordance with applicable rules and regulations of the SEC and the NYSE.
The Compensation Committee has the authority to
conduct such review has been retained by the Board or delegatedform and delegate authority and responsibilities to
another committee, and overseeing the evaluationsubcommittees of its members, so long as any subcommittee consists of at least two members of the
Board and management.Compensation Committee.
As of
December 31, 2015, our Corporate GovernanceApril 16, 2024, the Compensation Committee consisted of Ms.
ShannonEhrman and Messrs.
LaneyBaribault, Baty, Parker and
Mitchell,Stewart, each of whom is independent under the rules of the SEC and the
NYSE. Ms. ShannonNYSE and a “non-employee director” pursuant to Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Mr. Baty is the chair of the
Corporate GovernanceCompensation Committee. During
2015,2023, the
Corporate GovernanceCompensation Committee met
fivesix times.
Executive
31Matador Resources Company | 2024 Proxy Statement
Capital Markets and Finance Committee
The
ExecutiveCapital Markets and Finance Committee
has authority to discharge all the responsibilitiesprovides oversight of the
Board inCompany’s financial objectives, financial policies, capital structure and financing requirements. As of April 16, 2024, the
managementmembers of the
businessCapital Markets and
affairs of the Company, except where action of the full Board is required by statute or by our AmendedFinance Committee were Mmes. Appel and
Restated Certificate of Formation, as amended to date. The Executive Committee did not meet during 2015.As of December 31, 2015, our Executive Committee consisted ofRogers and Messrs. Foran, LaneyHoward, Parker and Sepulveda.Stewart. Mr. ForanParker is the chair of the ExecutiveCapital Markets and Finance Committee.
Marketing and Midstream Committee
The Marketing and Midstream Committee provides oversight of the Company’s marketing and midstream activities, projects, joint ventures and plans. As of April 16, 2024, the members of the Marketing and Midstream Committee were Mmes. Ehrman and Ward and Messrs. Byerley and Howard. Ms. Ehrman and Mr. Howard serve as co-chairs of the Marketing and Midstream Committee.
Operations and Engineering Committee
The Operations and Engineering Committee provides oversight of the development of our prospects, our drilling,
completions and
completion operations and our production operations and associated costs. In addition, the Operations and Engineering Committee provides oversight of the amount and classifications of our reserves and the design of our completion techniques and hydraulic fracturing operations and various other reservoir engineering matters. As of
December 31, 2015,April 16, 2024, the members of the Operations and Engineering Committee were
Ms. Ehrman and Messrs. Baribault
Foran and
Yates, Dr. Ohnimus and Mr. Downey (ex officio) and W.J. “Jack” Sleeper, Jr. (ex officio). Mr. Downey is a special advisor to our Board. Mr. Sleeper, a special advisor to our Board since the Company’s founding, passed away in early 2016.Foran. Mr. Baribault is the chair of the Operations and Engineering Committee.
Financial Committee
The Financial Committee provides oversight of our financial position, liquidity and capital needs and the various methods for financing our business. As of December 31, 2015, the members of the Financial Committee were Ms. Shannon and Messrs. Foran, Laney, Sepulveda and Yates. Mr. Sepulveda is the chair of the Financial Committee.
The Prospect Committee provides oversight of the technical analysis, evaluation and selection of our oil and natural gas prospects. As of
December 31, 2015,April 16, 2024, the members of the Prospect Committee were
Mmes. Ehrman and Ward and Messrs. Baribault, Foran
Yates and
Dr. Ohnimus and Messrs. Downey (ex officio) and Sleeper (ex officio).Parker. Mr.
DowneyBaribault is the chair of the Prospect Committee.
32Matador Resources Company | 2024 Proxy Statement
CORPORATE GOVERNANCE
Board’s Role in Risk Oversight
The Audit Committee has the responsibility to oversee the Company’s guidelines and policies to govern the process by which risk assessment and risk management are undertaken by
management.management, including with respect to corporate governance, financial, accounting, operational, environmental, health and safety, regulatory and cybersecurity risks. In connection with the Audit Committee’s oversight responsibility, executive management briefs the Audit Committee on a quarterly basis on risks faced by the Company. Under the Audit Committee’s oversight, management maintains a commercial insurance program for the Company’s benefit covering casualty, property, workers’ compensation, well operations and cybersecurity risks, among others. The
Nominating, Compensation
and Planning Committee has the responsibility to oversee that our incentive pay does not encourage unnecessary risk taking and to review and discuss the relationship between risk management policies and practices, corporate strategy and senior executive compensation.
Environmental, Social and Governance (ESG) Initiatives
Affirmation of Our Commitment
At Matador, we are committed to creating long-term value in a responsible manner. This commitment extends across our operations and includes a dedication to excellence with respect to environmental, social and governance (ESG) matters. Our guiding focus on good stewardship is reflected in our Code of Ethics and in our Corporate Governance Guidelines, which are reviewed annually by the Environmental, Social and Corporate Governance Committee of the Board. See “Corporate Governance” on page 25 for additional information.
Oversight and Coordination of ESG Efforts
The Board and senior management understand the importance of ESG matters and of supporting the Company’s ongoing efforts in this area. Matador’s senior management and full Board receive regular updates on our ESG efforts and engage with us to pursue continuous improvement in this area.
The Environmental, Social and Corporate Governance Committee is responsible for overseeing sustainability-related matters and monitoring the effectiveness of systems necessary to ensure compliance with ESG-related legislation, regulatory requirements, industry standards and internal policies, programs and practices. In conjunction with senior management, the committee has direct accountability to review and evaluate sustainability practices, risks and strategies and to make recommendations to the full Board regarding sustainability matters.
The Audit Committee also has responsibility through its role overseeing risk assessment and risk management processes, including with respect to operational, environmental, health and safety and regulatory risks.
Progress in Enhancing ESG Reporting
In continuing to raise the profile of the Company’s ongoing ESG-related initiatives externally, we recognize the growing value to stakeholders of consistent and comparable ESG disclosures. In early 2021, we retained Ms. Appel to conduct a review of industry ESG reporting practices and to serve as a dedicated single-focal point for our various ESG efforts.
In May 2021, Matador published sustainability metrics aligned with standards developed by the Sustainability Accounting Standards Board (SASB), and in July 2021, Matador published an update providing supplemental information to the Company’s initial report on these SASB-aligned ESG metrics.
In October 2023, Matador issued its annual Sustainability Report, which was first issued in December 2021. This report highlights Matador’s continued progress and improvements in its operating practices, including the quantitative metrics aligned with the SASB standards noted above, and should provide Matador’s stakeholders and interested parties with a standardized platform for evaluating the Company’s recent performance and future progress. Matador’s annual Sustainability Report, including the SASB-aligned sustainability metrics, is available on the Company’s website at www.matadorresources.com/sustainability. Information included in our Sustainability Report or otherwise included on our website is not incorporated into this Proxy Statement.
33Matador Resources Company | 2024 Proxy Statement
Ongoing Shareholder Engagement
In 2023, members of our Board and management team had conversations with a number of investors regarding our business and our investors’ priorities, consistent with Matador’s regular practice. Regarding ESG topics specifically, we met or reached out to shareholders representing an estimated 71% of the outstanding shares of our Common Stock (excluding shares held by our officers and directors) as of December 31, 2023. In addition, members of our management team attended ten investor conferences, hosted nine roadshows and participated in various investor presentation events and calls. Feedback from these conversations was shared with the Board and served as a valuable input to the enhanced ESG disclosures that we made over the last year. We appreciate the relationship building that results from cultivating these open dialogues and remain committed to engaging shareholders regularly.
ESG Performance Highlights
Highlights from the Company’s 2023 ESG initiatives are shown below.(1)
Environmental
| | | | | |
Continued Reduction of Per-Barrel Emissions(2) | •More than 80% reduction in flaring intensity from 2019 to 2023 |
•More than 70% reduction in methane intensity from 2019 to 2023 |
•More than 55% reduction in direct greenhouse gas emissions intensity from 2019 to 2023 |
| Meaningful Use of Non-Fresh Water, Including Recycled Water | •More than 95% of total water consumed in 2023 was non-fresh water(3) |
•More than 85% of operated wells completed in 2023 utilized recycled produced water(4) |
| Increased Transportation by Pipeline | •98% of operated produced water transported by pipeline in 2023 |
•94% of operated produced oil transported by pipeline in 2023 |
34Matador Resources Company | 2024 Proxy Statement
(1)The sustainability metrics included herein have been calculated using the best information available to the Company at the time of publication. The data utilized in calculating such metrics is subject to certain reporting rules, regulatory reviews, definitions, calculation of methodologies, estimates, adjustments and other factors. As a result, these metrics are subject to change from time to time as updated or other information becomes available. The metrics provided reflect both Matador’s gross operated exploration and production operations and gross operated midstream operations on a consolidated basis, except where otherwise noted.
(2)Emissions and flared volumes are calculated in accordance with Environmental Protection Agency standards and reflect only Matador’s gross operated exploration and production volumes.
(3)Fresh water is defined as <1,000 mg/L total dissolved solids and includes Matador’s gross operated volumes for hydraulic fracturing and completions operations, as well as estimates for Matador’s other operations.
(4)As some portion of the total fluid used for hydraulic fracturing operations.
Social
| | | | | |
| Investing in Human Capital |
• Provided approximately 22,000 hours of employee continuing education, equating to approximately 59 hours per employee in 2023 |
| Supporting Military Veterans |
• Congressional Medal of Honor Foundation • Michael E. Thornton Foundation |
| Supporting Communities & Charities Where We Live, Work, and Operate |
• Continued donations of food to the North Texas Food Bank and of toys to the Sheriff’s Offices and Courthouses in New Mexico’s Eddy and Lea Counties in 2023 |
Governance
| | | | | |
| Diverse and Independent Board Composition |
• Lead independent director • Nine of eleven independent directors • One minority and four female directors • Female membership since inception of predecessor company in 1988 |
| Engaged Board of Directors with Majority Voting Standard |
• No “overboarding” • Shareholder Advisory Committee for Board Nominations |
| Active Stakeholder Engagement |
• Shareholder outreach program, including discussion of compensation, governance, social, safety and environmental practices and disclosures |
Strategic Planning and Compensation Committee Interlocks and Insider Participation
Ms.
ShannonEhrman and Messrs. Baribault,
LaneyBaty, Parker and
RyanStewart served on
our Nominating,the Compensation
and Planning Committee during
the last completed fiscal year.2023. None of these individuals is or was previously one of our officers or employees. None of our executive officers serve on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or
Nominating,the Compensation
and Planning Committee. No member of our Board serves as an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. There were no compensation committee interlocks during
2015.2023. Mr. Baribault’s sister-in-law is an employee of the Company. For more information on this related person transaction, see “Transactions with Related Persons.”
35Matador Resources Company | 2024 Proxy Statement
Communications with Directors
The Board has established a process to receive communications from shareholders and other interested parties by mail. Shareholders and other interested parties may contact any member of the Board, any Board committee or the entire Board. To communicate with the Board, any individual director or any committee,
of directors, correspondence should be addressed to
the Board. All such correspondence should be sent “c/o Corporate Secretary” at One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.
Shareholders should mark the envelope containing any such communication as “Shareholder Communication with Directors” and clearly identify the intended recipient or recipients of the communication. The Corporate Secretary will review and forward correspondence to the appropriate person or
persons.persons as expeditiously as reasonably practicable. However, any such communication will not be forwarded if it does not fall within the scope of matters generally considered by the Board or otherwise fails to comply with the requirements of any applicable policy adopted by the Board relating to the subject matter of communications.
Any communications to the Company from one of the Company’s officers or directors will not be considered “shareholder communications.” Communications to the Company from one of the Company’s employees or agents will only be considered “shareholder communications” if they are made solely in such employee’s or agent’s capacity as a shareholder. Any shareholder proposal submitted pursuant to Rule 14a-8 promulgated under the Exchange Act will not be viewed as “shareholder communications.”
Executive Officers and Other Senior Officers of the Company
The following table sets forth the names, ages and positions of our executive officers and certain of our other senior officers at April
26, 2016:16, 2024:
| | | | | | | | |
Name | Age | Age
| | Positions Held With Us |
Executive Officers | | | | |
Joseph Wm. Foran | 71 | 63 | | Chairman of the Board and Chief Executive Officer |
Matthew V. Hairford
Van H. Singleton, II | 46 | 55 | | PresidentPresident—Land, Acquisitions & Divestitures and Planning |
David E. Lancaster
Brian J. Willey | 47 | 59 | | Executive Vice President and Chief Financial Officer |
Craig N. Adams
G. Gregg Krug | 63 | 49Executive Vice President—Marketing & Midstream Strategy |
| Christopher P. Calvert | 45 | Executive Vice President — Land, Legal & Administrationand Chief Operating Officer |
Van H. Singleton, II
W. Thomas Elsener | 39 | 38Executive Vice President—Reservoir Engineering and Senior Asset Manager |
| Bryan A. Erman | 46 | Executive Vice President and General Counsel and Head of M&A |
| Glenn W. Stetson | 39 | Executive Vice President—Production |
| Other Senior Officers |
| Michael D. Frenzel | 42 | Executive Vice President and Treasurer |
| Edmund L. Frost, III | 49 | Executive Vice President of LandGeosciences |
Bradley M. Robinson
| | 61 | | Senior Vice President of Reservoir Engineering and Chief Technology Officer |
Billy E. Goodwin
| | 58 | | Senior Vice President — Operations |
G. Gregg Krug
| | 55 | | Senior Vice President — Marketing and Midstream |
| | |
Other Senior Officers
| | | | |
Matthew D. Spicer
| | 48 | | Vice President and General Manager of Midstream |
Trent W. Green
| | 49 | | Vice President of Production |
Robert T. Macalik | 45 | 37 | | Executive Vice President and Chief Accounting Officer |
Kathryn L. Wayne
Jonathan J. Filbert | 37 | 55Executive Vice President—Land |
| Jordan M. Ellington | 32 | ControllerExecutive Vice President and TreasurerAsset Manager |
| M. Cliff Humphreys | 34 | Executive Vice President—Completions |
| Joshua D. Passauer | 38 | Executive Vice President—Drilling |
The following biographies describe the business experience of our executive officers and
certain of our otherthe senior
officers.officers listed above. Each officer serves at the discretion of our Board. There are no family relationships among any of our
executive officers.
| | | | | |
| Mr. Joseph Wm. Foran |
| Chairman of the Board and Chief Executive Officer | Please see the biography of Mr. Foran on page 19 of this Proxy Statement. |
36Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. Van H. Singleton, II |
| President—Land, Acquisitions & Divestitures and Planning | Mr. Singleton joined Matador Resources Company in August 2007 as a Landman and was promoted to Senior Staff Landman in 2009 and then to General Land Manager in 2011. In September 2013, Mr. Singleton became Vice President of Land, and he was promoted to Executive Vice President of Land in February 2015. He became the Company’s President—Land, Acquisitions & Divestitures and Planning in March 2022. Prior to joining Matador, Mr. Singleton founded and was President of VanBrannon and Associates, LLC and Southern Escrow and Title of Mississippi, LLC from 1998 to 2003, which provided full-spectrum land title work and title insurance in Mississippi, Louisiana, Texas and Arkansas. From 2003 until joining Matador in 2007, he served as general manager of his family’s real estate brokerage in Houston, Texas. Mr. Singleton received a Bachelor of Arts degree from the University of Mississippi in 2000. He is an active member of the American Association of Professional Landmen, the New Mexico Landman Association, the Permian Basin Landman Association and the Dallas Association of Petroleum Landmen. |
| Mr. Brian J. Willey |
| Executive Vice President and Chief Financial Officer | In February 2023, Mr. Willey was promoted to Executive Vice President and Chief Financial Officer. Mr. Willey joined Matador Resources Company in February 2014 as its Deputy General Counsel. In January 2016, Mr. Willey was appointed as Co-General Counsel, and in August 2016, he was promoted to Vice President and Co-General Counsel. Mr. Willey became Senior Vice President and Co-General Counsel in July 2018, and in March 2022, he was promoted to President of San Mateo and Senior Vice President, President and General Counsel of Midstream. In October 2022, Mr. Willey was promoted to President and General Counsel of Midstream Operations and Executive Vice President. Prior to joining Matador, Mr. Willey was an attorney with Dean Foods Company where he most recently served as Vice President, Chief Counsel – Corporate. Before Dean Foods, Mr. Willey served as a senior associate in the Dallas office of Baker Botts L.L.P. Mr. Willey’s practice focused on corporate matters, including mergers and acquisitions, public and private securities offerings, venture capital transactions and SEC compliance matters as well as board of director and corporate governance matters. Mr. Willey received a Bachelor of Science degree in Accounting in 2002 from Brigham Young University. He received his law degree in 2005 from The University of Texas School of Law, where he graduated with High Honors and was a member of the Order of the Coif in addition to being named a Chancellor and an Associate Editor on the Texas Law Review. Mr. Willey also served a church mission in the Philippines from 1995 to 1997. |
37Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. G. Gregg Krug |
| Executive Vice President—Marketing & Midstream Strategy | Mr. Krug joined Matador Resources Company in April 2012 as its Marketing Manager. In September 2013 he was named Vice President of Marketing for the Company and Vice President of Longwood Gathering & Disposal Systems, LP, and he was promoted to Senior Vice President—Marketing and Midstream in February 2016. He was promoted to Executive Vice President—Marketing and Midstream Strategy in April 2019. He has overall responsibility for Matador’s marketing activities of its oil and natural gas, as well as responsibility for all business aspects for Longwood Gathering & Disposal Systems, LP. Previously, Mr. Krug was with Unit Petroleum Company, an exploration and production company based in Tulsa, Oklahoma, as Marketing Manager, having joined in 2006. He and his staff were responsible for marketing, gas measurement, contract administration and production reporting in their core areas of Oklahoma, the Texas Panhandle, East Texas and Northwestern Louisiana. From 2005 to 2006, Mr. Krug served as Marketing Manager with Matador Resources Company. From 2000 to 2005, Mr. Krug served as Gas Scheduling Supervisor with Samson Resources in Tulsa, Oklahoma where he and his staff were responsible for scheduling natural gas sales as well as procurement of natural gas supply on Samson-owned gathering systems. From 1983 to 2000, Mr. Krug served with The Williams Companies in various capacities including in the Kansas Hugoton Field in Ulysses, Kansas and Tulsa, Oklahoma for Williams Natural Gas Pipeline and on the trading floor in Tulsa, Oklahoma for Williams Energy Services Company. Mr. Krug received a Bachelor of Business Administration degree from Oklahoma City University in 1996.
|
| Mr. Christopher P. Calvert |
| Executive Vice President and Chief Operating Officer | Mr. Calvert joined Matador Resources Company in October 2014 as a Senior Completions Engineer. In July 2018, he was named Vice President of Completions for the Company, and he was promoted to Senior Vice President—Operations in October 2019. In March 2022, he became a member of Matador’s new, diverse and highly experienced financial planning team supporting the CFO and the finance team. Mr. Calvert was promoted to Senior Vice President and Co-Chief Operating Officer in April 2022. In February 2023, Mr. Calvert was promoted to Executive Vice President and Co-Chief Operating Officer. Prior to joining Matador, Mr. Calvert worked as a Staff Reservoir Engineer in Chesapeake Energy Corporation’s South Texas—Eagle Ford group focusing on A&D evaluations and production and completions optimization. At Chesapeake, Mr. Calvert also held roles as a Senior Asset Manager responsible for completions and operations in the Niobrara Shale, a Senior Completions Engineer responsible for Bakken/Three Forks development and a Senior Operations Engineer focused on production and facility optimization on the Texas Gulf Coast. Prior to Chesapeake, Mr. Calvert worked as an Operations Engineer for Williams Production Company. In addition to his oil and natural gas industry experience, Mr. Calvert has worked in corporate financial controls as an internal Sarbanes-Oxley compliance auditor. Mr. Calvert received Bachelor of Science degrees in Finance and Petroleum Engineering from the University of Wyoming in 2002 and 2008, respectively. He is a member of the Society of Petroleum Engineers. |
38Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. W. Thomas Elsener |
| Executive Vice President—Reservoir Engineering and Senior Asset Manager | Mr. Elsener joined Matador Resources Company in April 2013 as an Engineer. In June 2017, he was promoted to Vice President—Engineering and Asset Manager, and he was promoted to Senior Vice President—Reservoir Engineering and Senior Asset Manager in October 2019. In March 2022, Mr. Elsener became a member of Matador’s new, diverse and highly experienced financial planning team supporting the CFO and the finance team. Mr. Elsener was named Executive Vice President—Reservoir Engineering and Senior Asset Manager in April 2022. Prior to joining Matador, Mr. Elsener served in various engineering roles at Encana Oil & Gas (USA) in Dallas, Texas from 2007 to 2013, including reservoir, completions, drilling, business development and new ventures. While at Encana, Mr. Elsener was involved with the exploration and development of assets in the Barnett shale, Deep Bossier, Haynesville shale and other new domestic ventures. Mr. Elsener received a Bachelor of Science degree in Petroleum Engineering from Texas A&M University in 2007. He is a member of the Society of Petroleum Engineers. |
| Mr. Bryan A. Erman |
| Executive Vice President and General Counsel and Head of M&A | Mr. Erman joined Matador Resources Company in January 2016 as its Co-General Counsel. In August 2016, Mr. Erman was promoted to Vice President and Co-General Counsel. He became Senior Vice President and Co-General Counsel in July 2018. In March 2022, Mr. Erman became Senior Vice President and General Counsel and in October 2022, Mr. Erman was promoted to Executive Vice President and General Counsel and Head of M&A. Prior to joining Matador, Mr. Erman was a Partner at Carrington, Coleman, Sloman & Blumenthal, L.L.P. in Dallas, having joined the firm in 2010. From 2003 to 2010, he was an associate in the Dallas and Washington, D.C. offices of Baker Botts L.L.P. Mr. Erman’s practice focused on litigation matters, including oil and natural gas, securities and other commercial litigation, as well as corporate governance matters. Before attending law school, Mr. Erman worked for Oklahoma Governor Frank Keating. Mr. Erman received a Bachelor of Arts degree in Political Science in 1999 from the University of Oklahoma. He received his law degree in 2003 from Southern Methodist University Dedman School of Law, where he graduated cum laude and was a Hatton W. Sumners Scholar, a member of the Order of the Coif and an Articles Editor on the SMU Law Review. |
39Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. Glenn W. Stetson |
| Executive Vice President—Production | Mr. Stetson joined Matador Resources Company in August 2014 as a Production Engineer, and in July 2015, he was promoted to Asset Manager. Mr. Stetson was promoted to the role of Vice President and Asset Manager in July 2018 and to Senior Vice President of Production and Asset Manager in October 2019. In March 2022, Mr. Stetson became a member of Matador’s new, diverse and highly experienced financial planning team supporting the CFO and the finance team. Mr. Stetson was promoted to the role of Executive Vice President—Production in April 2022. Prior to joining Matador, Mr. Stetson worked at Chesapeake Energy Corporation from 2008 to 2014, holding multiple positions in both the production and completions departments. Most of his time at Chesapeake was spent in the Barnett shale in North Texas, although he also spent some time working in northern Pennsylvania managing the northeast portion of Chesapeake’s Marcellus shale operated production. Mr. Stetson graduated Cum Laude from Oklahoma State University in 2007, receiving a Bachelor of Science degree in Mechanical Engineering Technology. Mr. Stetson is a Licensed Professional Engineer in the State of Oklahoma. |
| Other Senior Officers |
| Mr. Michael D. Frenzel |
| Executive Vice President and Treasurer | Mr. Frenzel was named Executive Vice President and Treasurer in April 2022. Mr. Frenzel’s responsibilities include treasury, financial planning and forecasting, budgeting, capital markets, hedging, financial reporting and investor relations, and he has served as the primary financial officer for San Mateo, Matador’s midstream joint venture, since San Mateo’s formation in 2017. In March 2022, Matador’s Board and CEO asked Mr. Frenzel to act as the Company’s principal financial officer until a new CFO was appointed in February 2023. Mr. Frenzel first worked for Matador’s predecessor company, Matador Petroleum Corporation, as an intern in the summers of 2000, 2001 and 2002. From 2006 to 2010, Mr. Frenzel worked as a Senior Financial Analyst before leaving to obtain his Masters of Business Administration degree in 2010 from Duke University’s Fuqua School of Business. Mr. Frenzel rejoined Matador in 2013 as its Senior Strategy and Financial Analyst and Assistant Treasurer and was promoted to Finance Director and Assistant Treasurer in January 2017. In August 2018, Mr. Frenzel was promoted to Vice President and Treasurer. Mr. Frenzel was promoted to Senior Vice President and Treasurer in October 2020. Before rejoining Matador in 2013, Mr. Frenzel worked as an Investment Associate for Hamm Capital, LLC and as a Financial Analyst and Assistant to the CEO at Continental Resources. In addition to his energy industry experience, Mr. Frenzel also has consulting experience with Deloitte Consulting LLP. Mr. Frenzel graduated summa cum laude from Vanderbilt University in 2004, receiving a Bachelor of Arts degree in Economics and Mathematics, and earned the designation of Fuqua Scholar while receiving a Master of Business Administration degree from Duke University’s Fuqua School of Business in 2012.
|
40Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Dr. Edmund L. Frost III |
| Executive Vice President of Geosciences | Dr. Frost joined Matador Resources Company in August 2014 as a Senior Geologist and in July 2015 was promoted to Chief Geologist. In June 2017, he was promoted to Vice President of Geosciences, and in July 2019, Dr. Frost was promoted to Senior Vice President of Geosciences. In February 2023, Dr. Frost was promoted to Executive Vice President of Geosciences. Prior to joining the Company, Dr. Frost worked at the Bureau of Economic Geology at The University of Texas at Austin as a Research Associate, a role he began in 2011. While at The University of Texas, his research focused on unconventional resource development in the Delaware Basin and in the Austin Chalk-Eagle Ford system. Dr. Frost began his career in the Subsurface Technology Group at ConocoPhillips in 2007, where he worked a variety of international and domestic basins. Dr. Frost received a Bachelor of Science degree in Geology from the University of Colorado at Boulder in 1998 and a PhD degree in Geology in 2007 from The University of Texas at Austin. Dr. Frost has authored several peer-reviewed papers, conducted multiple industry presentations and led a number of industry field trips in the Delaware Basin. |
| Mr. Robert T. Macalik |
| Executive Vice President and Chief Accounting Officer | Mr. Macalik joined Matador Resources Company in July 2015 as Vice President and Chief Accounting Officer. He was promoted to Senior Vice President and Chief Accounting Officer in November 2017. In March 2022, Mr. Macalik became a member of Matador’s new, diverse and highly experienced financial planning team supporting the CFO and the finance team. Mr. Macalik was named Executive Vice President and Chief Accounting Officer in April 2022. Prior to joining Matador, from 2012 to 2015, Mr. Macalik worked at Pioneer Natural Resources Company as Corporate Controller and, previously, as Director of Technical Accounting and Financial Reporting. At Pioneer, Mr. Macalik supervised corporate accounting and financial reporting functions. Prior to joining Pioneer, he was a Senior Manager with PricewaterhouseCoopers (PwC), joining the public accounting firm in 2002. During his tenure with PwC, Mr. Macalik conducted and managed audits for various companies, primarily public companies in the oil and natural gas industry, and managed numerous client relationships. Mr. Macalik received a Bachelor of Arts degree in History, a Bachelor of Business Administration degree and a Master of Professional Accounting degree all from The University of Texas at Austin in 2002. He is a licensed Certified Public Accountant in the State of Texas.
|
41Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. Jonathan J. Filbert |
| Executive Vice President—Land | Mr. Filbert joined Matador Resources Company in February 2013 as a Senior Staff Landman. In April 2015, he was promoted to General Land Manager, and in December 2017, he was promoted to General Land Manager and Director of Acquisitions. Mr. Filbert was promoted to the role of Vice President of Land in July 2018 and to Senior Vice President—Land in October 2020. Mr. Filbert was promoted to his current role of Executive Vice President—Land in October 2023. Prior to joining Matador, Mr. Filbert worked as a landman at Chesapeake Energy Corporation from 2010 to 2013. Most of his time at Chesapeake was spent working with the new ventures team on their Utica and Marcellus shale assets in Ohio and northern Pennsylvania. Mr. Filbert graduated from the University of Oklahoma in 2010, receiving a Bachelor of Business Administration degree in Energy Management and Finance. He is an active member of the American Association of Professional Landmen, the New Mexico Landman Association, the Permian Basin Landman Association and the Dallas Association of Petroleum Landmen. |
| Mr. Jordan M. Ellington |
| Executive Vice President and Asset Manager | Mr. Ellington joined Matador Resources Company in November 2018 as a Drilling Engineer. In October 2019, Mr. Ellington was promoted to Senior Drilling Engineer and MaxOps Coordinator. He was promoted to Vice President and Asset Manager in April 2021, and then to Senior Vice Present and Asset Manager in February 2023. Mr. Ellington was promoted to the role of Executive Vice President and Asset Manager in February 2024. Prior to joining Matador, Mr. Ellington worked for Chevron from 2014 to 2018 in various roles within the drilling and completions department. Most of his time at Chevron was spent focusing on operations and the execution of major capital projects and exploration and appraisal wells in the Deepwater Gulf of Mexico. Mr. Ellington graduated summa cum laude from Texas A&M University in 2014, receiving a Bachelor of Science degree in Mechanical Engineering. He is an active member of the Society of Petroleum Engineers and American Association of Drilling Engineers. |
| Mr. M. Cliff Humphreys |
| Executive Vice President—Completions | Mr. Humphreys joined Matador Resources Company in March 2014 as a Completions Engineer. In December 2018, Mr. Humphreys was promoted to Area Completions Manager. He was promoted to Vice President—Completions in October 2019, and then to Senior Vice President—Completions in April 2022. Mr. Humphreys was promoted to his current role of Executive Vice President—Completions in October 2023. Prior to joining Matador, Mr. Humphreys was an Engineer for Encana Oil & Gas (USA), primarily assisting with hydraulic fracturing operations in the company’s East Texas and Louisiana developments. In his time at Matador, Mr. Humphreys has overseen completion operations in both the Delaware Basin and Eagle Ford assets and has directed the company’s efforts in recycling produced water for completion operations. Mr. Humphreys received a Bachelor of Science degree in Mechanical Engineering from The University of Texas at Austin in 2013. He is an active member of the Society of Petroleum Engineers and American Association of Drilling Engineers, and serves on the scholarship selection committee for the Wichita Falls Area Community Foundation. |
42Matador Resources Company | 2024 Proxy Statement
| | | | | |
| Mr. Joshua D. Passauer |
| Executive Vice President—Drilling | Mr. Passauer joined Matador Resources Company in January 2012 as a Drilling Engineer. In his initial role at Matador, he managed drilling rigs in the Eagle Ford and Austin Chalk plays. In 2013, he was part of Matador’s transition to the Delaware basin. In January 2017, he was promoted to Area Drilling Manager. In July 2018 he was promoted to Vice President of Drilling and then to Senior Vice President of Drilling in April 2022. He also had the opportunity to work alongside management in creating the MAXCOM team, including overseeing the technology and layout components of the MAXCOM room. Mr. Passauer was promoted to his current role of Executive Vice President—Drilling in October 2023. Prior to joining Matador, Mr. Passauer was an Advanced Services Engineer with Schlumberger from 2010 to 2012, working in-house with Exco Resources in their drilling group. While at Exco, he partnered with a team to create an innovative horizontal drill bit design that optimized the most important portion of a horizontal well. This unique bit design won an innovation award from British Gas, and he was honored to receive that award in London. He also co-authored an associated article that was published in Oilfield Technology magazine. Prior to Schlumberger, Mr. Passauer worked for Smith International in-house with Samson in Tulsa, Oklahoma. He began his career in the oil and gas business in Midland, TX, spending two years in a field role with Smith. This role with Smith gave him valuable field experience as he was able to visit a wide array of drilling rigs throughout the Delaware and Midland basins. Mr. Passauer graduated from Baylor University in 2006 with a Bachelor of Science in Mechanical Engineering and a minor in mathematics. He is an active member of the Society of Petroleum Engineers and the American Association of Drilling Engineers. |
Mr. Joseph Wm. Foran
. Please see the biography of Mr. Foran on page 12 of this Proxy Statement.Mr. Matthew V. Hairford. Mr. Hairford joined
43Matador Resources Company in July 2004 as its Drilling Manager. He was named Vice President of Drilling in May 2005; Vice President of Operations in May 2006; Executive Vice President of Operations in May 2009; and in November 2013 assumed the title of President. He was previously with Samson Resources, an exploration and production company, as Senior Drilling Engineer, having joined Samson in 1999. His responsibilities there included difficult Texas and Louisiana Gulf Coast projects, horizontal drilling projects and a start-up drilling program in Wyoming. The scope of this work ranged from multi-lateral James Lime wells in East Texas to deep wells in South Texas and South Louisiana. Mr. Hairford has drilled many geo-pressured wells in Texas and Louisiana, along with normally pressured wells in Southwest Wyoming and East Texas. Additional responsibilities included a horizontal well program in Roger Mills County, Oklahoma at 15,000 feet vertical depth. Mr. Hairford has experience in air drilling, underbalanced drilling, drilling under mud caps and high temperature and pressure environments. From 1998 until 1999, Mr. Hairford served as Senior Drilling Engineer with Sonat, Inc., a global company involved with natural gas transmission and marketing, oil and natural gas exploration and production and oil services. His responsibilities included Pinnacle Reef wells in East Texas and deep horizontal drilling in the Austin Chalk field in Central Louisiana. From 1984 to 1998, Mr. Hairford served in various drilling engineering capacities with Conoco, Inc., an integrated energy company. His operational areas included the Appalachian Basin, Illinois Basin, Permian Basin, Texas Panhandle and Val Verde Basin. Mr. Hairford was selected as a member of a three-person team to explore the use of unconventional technologies to identify a potential step change in the drilling sector. Multiple techniques were evaluated and tested, including declassified defense department technologies. Additional Conoco assignments included both field and office drilling positions in Midland, Texas and Oklahoma City, Oklahoma. Earlier in his career with Conoco, Mr. Hairford was selected to participate in the Conoco Drilling Rig Supervisor Training Program in Houston, Texas. This program consisted of two years working a regular rotation as a drilling representative on rigs and as a drilling engineer in various domestic offices. Mr. Hairford began hiscareer in 1984 with Conoco in a field production assignment in Hobbs, New Mexico. Mr. Hairford received his Bachelor of Science degree in Petroleum Engineering Technology from Oklahoma State University in 1984. He is an active member of the American Association of Drilling Engineers, the American Petroleum Institute and the Society of Petroleum Engineers. Mr. Hairford has also undertaken additional training through Stanford University’s Executive Education programs, including, most recently, the Stanford Graduate School of Business flagship six week Stanford Executive Program.
Mr. David E. Lancaster. Mr. Lancaster joined Matador Resources Company in December 2003 and serves as Executive Vice President and Chief Financial Officer. Mr. Lancaster has served in several capacities since joining Matador, including Vice President of Business Development, Acquisitions and Finance from December 2003 to May 2005; Vice President and Chief Financial Officer from May 2005 to May 2007; and Executive Vice President and Chief Financial Officer since May 2007. He also served as Chief Operating Officer from May 2009 to May 2015. From August 2000 to December 2003, he was Marketing Manager for Schlumberger Limited’s Data & Consulting Services, which provided full-field reservoir characterization, production enhancement, multidisciplinary reservoir and production solutions and field development planning. In this position, he was responsible for global marketing strategies, business models, input to research and development, commercialization of new products and services and marketing communications. From 1999 to 2000, Mr. Lancaster was Business Manager, North and South America, for Schlumberger Holditch-Reservoir Technologies, the petroleum engineering consulting organization formed following Schlumberger’s acquisitions of S.A. Holditch & Associates, Inc. and Intera Petroleum Services. In this role, he was responsible for the business operations of 12 consulting offices throughout North and South America. Mr. Lancaster worked with Schlumberger for six years following its acquisition of S.A. Holditch & Associates, Inc. in October 1997. He joined S.A. Holditch & Associates in 1980, and was one of the principals in that well-known petroleum engineering consulting firm. Between 1980 and 1997, Mr. Lancaster held positions ranging from Senior Petroleum Engineer to Senior Vice President — Business Development. In this latter role, he was responsible for marketing and sales, as well as the company’s commercial training business. During most of his tenure at S.A. Holditch & Associates, Inc., Mr. Lancaster was a consulting reservoir engineer with particular emphasis on characterizing and improving production from unconventional natural gas reservoirs. For more than seven years during this time, he was the Project Manager for the Gas Research Institute’s Devonian Shales applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability, natural gas shale reservoirs. He was also the lead reservoir engineer for the Secondary Gas Recovery project sponsored by the Gas Research Institute and the U.S. Department of Energy, looking at ways to improve recovery from compartmentalized natural gas reservoirs in North and South Texas. Mr. Lancaster began his career as a reservoir engineer for Diamond Shamrock Corporation in 1979. Mr. Lancaster received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1979 and 1988, respectively, graduating summa cum laude. He has authored or co-authored more than 50 technical papers and articles, as well as numerous other published reports and industry presentations. He is a member of the Society of Petroleum Engineers, and he served as a charter member and former Vice Chairman of the Texas A&M University Petroleum Engineering Advisory Board. In 2014, Mr. Lancaster was inducted into the Texas A&M University Petroleum Engineering Academy of Distinguished Graduates. Mr. Lancaster is a Licensed Professional Engineer in the State of Texas.
Mr. Craig N. Adams. Mr. Adams joined Matador Resources Company in September 2012 as its Vice President and General Counsel. In July 2013, Mr. Adams was promoted to Executive Vice President — Land and Legal and became Executive Vice President — Land, Legal & Administration in June 2015. Before joining Matador Resources Company, Mr. Adams was a partner with Baker Botts L.L.P. from March 2001 to September 2012 where he focused his practice on securities, mergers and acquisitions and corporate governance matters. He was a partner with Thompson & Knight L.L.P. from January 1999 to February 2001 and an associate from September 1992 to December 1998. Mr. Adams received a Bachelor of Business Administration degree in finance from Southern Methodist University in 1988 and his law degree in 1992 from Texas Tech University School of Law, where he was a Comment Editor of the Texas Tech Law Review.
Mr. Van H. Singleton, II. Mr. Singleton joined Matador Resources Company in August 2007 as a Landman and was promoted to Senior Staff Landman in 2009 and then to General Land Manager in 2011. In September 2013, Mr. Singleton became Vice President of Land for the Company, and he was promoted to Executive Vice President of Land in February 2015. Prior to joining Matador, Mr. Singleton founded and was President of VanBrannon and Associates, LLC and Southern Escrow and Title of Mississippi, LLC from 1998 to 2003, which provided full-spectrum land title work and title insurance in Mississippi, Louisiana, Texas and Arkansas. From 2003 until joining Matador in 2007, he served as general manager of his family’s real estate brokerage in Houston, Texas. Mr. Singleton received a Bachelor of Arts degree in Criminal Justice from the University of Mississippi in 2000. He is an active member of the American Association of Professional Landmen, the New Mexico Landman Association, the Permian Basin Landman Association and the Dallas Association of Petroleum Landmen.
Mr. Bradley M. Robinson. Mr. Robinson joined Matador Resources Company in August 2003 as one of its founders, serving as our Vice President of Reservoir Engineering until his promotion to Senior Vice President of Reservoir Engineering in February 2016. He assumed the additional role of Chief Technology Officer in May 2013. Prior to joining Matador, from 1997 to August 2003, Mr. Robinson held the position of Advisor with Schlumberger Limited’s Data & Consulting Services business unit, which provided full-field reservoir characterization, production enhancement, multidisciplinary reservoir and production solutions and field development planning, where he was responsible for the development and application of new technologies for well completions and stimulation, provided technical expertise for reservoir management and field development projects, taught basic and advanced industry courses in well completions and stimulation and provided internal training in production engineering and stimulation methods. Mr. Robinson worked with Schlumberger for six years following its acquisition of S.A. Holditch & Associates, Inc. in 1997. Mr. Robinson joined Holditch in 1979, and was one of the principals in that well-known petroleum engineering consulting firm. From 1979 to 1982, Mr. Robinson served as Senior Petroleum Engineer and was involved in all aspects of reservoir and production engineering for both conventional and low permeability oil and natural gas fields. From 1982 to 1997, he was Holditch’s Vice President — Production Engineering, where he was responsible for coordination and management of production and completion engineering projects, including development drilling and openhole data acquisition programs, design and supervision of initial well completions and workovers, transient well test design and analysis and hydraulic fracture stimulation design and supervision. His duties also included reserves evaluation and economic analysis of new and existing wells, and his areas of specialization included low permeability natural gas sands, coalbed methane reservoirs and horizontal wells. For approximately 10 years during this time, he served as assistant project manager for the Gas Research Institute’s Tight Gas Sands and Horizontal Gas Wells applied research projects investigating ways to improve reservoir characterization, completion practices and natural gas recovery in low permeability natural gas reservoirs and horizontal natural gas wells. During his career, he has worked all over the world, including the United States, Canada, Venezuela, Colombia, Mexico, Egypt, the North Sea, Russia and Indonesia, among others. Mr. Robinson began his career in 1977 with Marathon Oil Company, serving as an Associate Production Engineer and later as a Reservoir Engineer in Midland. Mr. Robinson received Bachelor and Master of Science degrees in Petroleum Engineering from Texas A&M University in 1977 and 1986, respectively. He has authored or co-authored more than 30 technical articles appearing in industry and/or technical publications and has made numerous engineering technical presentations. Mr. Robinson is a member of the Society of Petroleum Engineers and is a Licensed Professional Engineer in the State of Texas. He served as Chairman of the Dallas Section of the Society of Petroleum Engineers in 2011 and 2012. He also received the 2013 Engineer of the Year Award presented by the Dallas Section of the Society of Petroleum Engineers and the 2013 Completions Optimization and Technology award presented by the Mid-Continent region of the Society of Petroleum Engineers.
Mr. Billy E. Goodwin. Mr. Goodwin joined Matador Resources Company in July 2010 as Drilling Manager. In September 2013 he was named Vice President of Drilling for the Company, and he was promoted to Senior Vice President — Operations in February 2016. He was previously with Samson Resources, a company he joined in 2001 to supervise the drilling of underbalanced multilateral horizontal wells. In his roles as Senior Drilling Engineer and Area Drilling Manager for Samson, Mr. Goodwin engineered and managed operations in
the Permian Basin, South Texas, East Texas, Mid-Continent and Gulf Coast areas. Mr. Goodwin worked with Conoco, Inc. before joining Samson. He began his career in 1985 in Conoco’s production department before joining the drilling department in 1989. Mr. Goodwin has diverse horizontal operational experience both onshore and offshore, and both domestically and internationally, including in the Middle East, Southeast Asia and South America. Throughout his career, Mr. Goodwin has developed underbalanced drilling, managed pressure drilling and drill-in casing techniques for normal and geo-pressured environments. Mr. Goodwin received a Bachelor of Science degree in Petroleum Engineering Technology from Oklahoma State University in 1984. He is a member of the Society of Petroleum Engineers and the American Association of Drilling Engineers. Mr. Goodwin served in the United States Marine Corps.
Mr. G. Gregg Krug. Mr. Krug joined Matador Resources Company in April 2012 as its Marketing Manager. In September 2013 he was named Vice President of Marketing and Vice President of Longwood Gathering & Disposal Systems, LP for the Company, and he was promoted to Senior Vice President — Marketing and Midstream in February 2016. He has overall responsibility for Matador’s marketing activities of its oil and natural gas, as well as responsibility for all business aspects for Longwood Gathering & Disposal Systems, LP. Previously, Mr. Krug was with Unit Petroleum Company, an exploration and production company based in Tulsa, Oklahoma, as Marketing Manager, having joined in 2006. He and his staff were responsible for marketing, gas measurement, contract administration and production reporting in their core areas of Oklahoma, the Texas Panhandle, East Texas and Northwestern Louisiana. From 2005 to 2006, Mr. Krug served as Marketing Manager with Matador Resources Company. From 2000 to 2005, Mr. Krug served as Gas Scheduling Supervisor with Samson Resources in Tulsa, Oklahoma where he and his staff were responsible for scheduling natural gas sales as well as procurement of natural gas supply on Samson owned gathering systems. From 1983 to 2000, Mr. Krug served with The Williams Companies in various capacities including in the Kansas Hugoton Field in Ulysses, Kansas and Tulsa, Oklahoma for Williams Natural Gas Pipeline and on the trading floor in Tulsa, Oklahoma for Williams Energy Services Company. Mr. Krug received a Bachelor of Business Administration degree from Oklahoma City University in 1996.
Other Senior Officers
Mr. Matthew D. Spicer. Mr. Spicer joined Matador Resources Company in March 2014 as Senior Representative of Business Development and was promoted to Manager of Business Development and then General Manager of Midstream later in 2014. In October 2015, Mr. Spicer was promoted to Vice President and General Manager of Midstream. Prior to joining the Company, Mr. Spicer served as the Director of Flight Operations for L-3 Unmanned Systems, also serving in various roles including as Program Manager and in Business Development during his tenure with L-3, which began in 2011. Mr. Spicer served in the United States Marine Corps from 1991 to 2014, both in active duty and as a reservist, before his retirement as a Lieutenant Colonel in 2014. Mr. Spicer also served as a first officer with American Airlines from 2000 to 2003 following his active duty in the United States Marine Corps. Mr. Spicer received a Bachelor of Science degree in Manufacturing Engineering Technology from Central Michigan University in 1991.
Mr. Trent W. Green. Mr. Green joined Matador Resources Company in connection with the HEYCO Merger in February 2015 as Vice President of Production. Previously, Mr. Green served as Chief Operating Officer of Harvey E. Yates Company and oversaw all of its oil and natural gas operations, including safety and regulatory compliance. Prior to joining Harvey E. Yates Company in 2012, Mr. Green was Rocky Mountain Division Manager for BOPCO, L.P., a Fort Worth, Texas based company. From 2002 to 2007, Mr. Green served as Division Manager for Pinnacle Technologies, where he expanded its microseismic and tiltmeter mapping business in the Rocky Mountain Region. Mr. Green owned his own oilfield service business from 2000 to 2002. That business provided specialized in-situ reservoir testing services to coalbed methane and shale developers. Mr. Green previously worked for S.A. Holditch & Associates, Inc. and Amerada Hess performing production, reservoir and completion engineering duties throughout North America. He has also taught courses worldwide through NeXT, LLC, an industry training company. Mr. Green received his Bachelor of Science degree in Petroleum Engineering from Montana Tech of the University of Montana in 1989 and his Master of Business
Administration from the University of Denver in 2007. He is a registered professional engineer in the State of Colorado.
Mr. Robert T. Macalik. Mr. Macalik joined Matador Resources Company in July 2015 as Vice President and Chief Accounting Officer. He has more than 10 years of experience in public accounting with significant experience in the upstream oil and natural gas industry. From 2012 to 2015, Mr. Macalik worked at Pioneer Natural Resources Company as Corporate Controller and, previously, as Director of Technical Accounting and Financial Reporting. At Pioneer, Mr. Macalik supervised corporate accounting and financial reporting functions. Prior to joining Pioneer, he was a Senior Manager with PricewaterhouseCoopers (PwC), joining the public accounting firm in 2002. During his tenure with PwC, Mr. Macalik conducted and managed audits for various companies, primarily public companies in the oil and natural gas industry, and managed numerous client relationships. Mr. Macalik received a Bachelor of Arts degree in History, a Bachelor of Business Administration degree and a Master of Professional Accounting degree all from The University of Texas at Austin in 2002. He is a licensed Certified Public Accountant in the State of Texas.
Ms. Kathryn L. Wayne. Ms. Wayne was one of the original employees of Matador Resources Company and has served as the Company’s Controller and Treasurer since 2003. She was previously with Matador Petroleum Corporation, joining the company in 1991. Immediately prior to its sale, Ms. Wayne was Senior Revenue Accountant, and her duties included supervision of the revenue accounting staff, management of the revenue distribution process and preparation of monthly accruals and various required regulatory reports. Ms. Wayne began her career with Mobil Oil Corporation, where she held various positions in the gas accounting department. Ms. Wayne received a Bachelor of Arts degree in Accounting from Texas A&M University in 1983. She is recognized by the Council of Petroleum Accountants Societies (COPAS) as an Accredited Petroleum Accountant (APA). She is an active member of COPAS and served a three-year term on the COPAS APA Board of Examiners.
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2024 Proxy Statement
PROPOSAL 2
— APPROVAL OF OUR AMENDED AND RESTATED ANNUAL INCENTIVE PLANBackground
The Company previously sponsored and maintained the Matador Resources Company Annual Incentive Plan for Management and Key Employees, effective January 1, 2012 (the “2012 Annual Incentive Plan”). On February 19, 2016, our Board adopted, subject to shareholder approval, the Matador Resources Company Amended and Restated Annual Incentive Plan for Management and Key Employees (the “Incentive Plan”). The Incentive Plan is designed to link executive decision-making and performance with the Company’s goals, reinforce these goals and ensure the highest level of accountability for the success of the Company as a whole.
The Incentive Plan advances the interests of the Company and its shareholders by providing the Company with an additional means by which it can sustain and enhance its culture of personal commitment on the part of its executives, select managers and key employees in the continued growth, development and financial success of the Company, and encourage them to remain with and devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders. The Incentive Plan provides for the granting of awards of incentive compensation that may be paid to a participant upon satisfaction of specified Performance Goals (as defined below) for a particular Performance Period (as defined below).
The Incentive Plan is designed to satisfy the requirements of Code Section 162(m) so that the Company can take federal income tax deductions for the performance-based compensation paid under the Incentive Plan to its named executive officers. Code Section 162(m) generally provides that publicly-held companies may not take a federal income tax deduction for certain compensation in excess of $1 million paid to certain named executive officers in any one year unless that compensation is “performance-based.” Compensation can qualify as performance-based only if the material terms of the performance goals are disclosed to and approved by a company’s shareholders before the compensation is paid and other requirements are satisfied. The material terms to be disclosed include the following: (a) the employees eligible to receive compensation, (b) a description of the business criteria on which the performance goals are based and (c) either the maximum amount of compensation that could be paid to an employee if the performance goals are achieved or the formula used to calculate the amount.
The following is a brief summary of the material features of the Incentive Plan as it pertains to certain “Covered Employees” (generally, an individual employed by the Company who, on the last day of the taxable year, either is the Company’s principal executive officer or an individual who is among the three highest compensated officers for the taxable year (other than the principal executive officer or the principal financial officer)). The full text of the Incentive Plan is attached asAppendix A to this Proxy Statement. The description of the Incentive Plan contained herein is not intended to be complete and is qualified in its entirety by reference toAppendix A, which contains the complete text of the Incentive Plan.
The Board has determined that the Incentive Plan is in the best interest of the Company and its shareholders and has recommended that the Company’s shareholders approve the Incentive Plan.
Plan Administration
The Incentive Plan will be administered by the Nominating, Compensation and Planning Committee or such other committee as determined by the Board, and which shall consist of two or more “outside directors” within the meaning of Code Section 162(m) (the “Plan Committee”). The Plan Committee has the authority and discretion to administer and interpret the provisions of the Incentive Plan, to adopt such rules and regulations for the administration of the Incentive Plan and to take such other actions as permitted under the Incentive Plan, as the Plan Committee deems necessary or advisable in the administration of the Incentive Plan. The Plan Committee has the full authority to (i) designate the employees who are eligible to participate in the Incentive Plan; (ii) establish the Performance Goals and achievement levels for each participant; and (iii) establish and certify the achievement of the Performance Goals for the applicable Performance Period. Decisions of the Plan
Committee will be final, binding and conclusive upon all parties, including, without limitation, the Company and plan participants.
Plan Eligibility and Participation
Participation in the Incentive Plan is limited to those employees who are designated by the Plan Committee. For each period selected by the Plan Committee for payment of incentive compensation, referred to as a “Performance Period” (a Performance Period coincides with the fiscal year of the Company), the Plan Committee will select the particular employees to whom incentive compensation may be awarded. With respect to Covered Employees, the Plan Committee must make its determination within the first 90 days of the Performance Period (and in the case of a Performance Period less than a fiscal year, such determinations will be made no later than the date on which 25% of the Performance Period has elapsed). Awards may be made by the Plan Committee at any time and from time to time during a Performance Period to new participants, or to then participants, and may include or exclude previous participants, as the Plan Committee shall determine. The Plan Committee’s determinations under the Incentive Plan may be made by the Committee selectively among employees who receive, or are eligible to receive, awards under the Incentive Plan.
Determination of Performance Goals and Awards
With respect to each Performance Period, the Plan Committee shall establish a performance goal for all participants in such Performance Period with the creation of a performance pool, which shall be 3.5% of Adjusted EBITDA (as defined in the Incentive Plan) for such Performance Period; provided that Adjusted EBITDA equals or exceeds $50,000,000 for such Performance Period (the “Adjusted EBITDA Pool Goal”). Once the Adjusted EBITDA Pool Goal is reached or exceeded, the awards will be allocated to each participant based on the allocation formula set forth in the table below. The table below establishes the maximum award payable to any participant for a specified Performance Period.
| | | | |
Participant
| | Percentage of Performance
Pool (Maximum) | |
Chief Executive Officer
| | | 30% | |
Second Highest Paid Participant
| | | 17.5% | |
Third Highest Paid Participant
| | | 17.5% | |
Fourth Highest Paid Participant
| | | 17.5% | |
Fifth Highest Paid Participant
| | | 17.5% | |
| | | | |
Total
| | | 100% | |
| | | | |
In the Plan Committee’s discretion, supplemental performance goals (the “Discretionary Goals”), in addition to the Adjusted EBITDA Pool Goal set forth above (collectively with the Discretionary Goals, the “Performance Goals”), may be established by the Plan Committee for each Performance Period. The Discretionary Goals may be identical for all participants or, at the discretion of the Plan Committee, may be different to reflect more appropriate measures of individual performance. No later than the 90th day of the Performance Period (and in the case of a Performance Period less than a fiscal year, such determination shall be made no later than the date that 25% of the Performance Period has elapsed), the Plan Committee will approve (i) the Performance Goals for the Performance Period (if applicable), (ii) the threshold, target, and maximum levels for the Performance Goals for the Performance Period (if applicable), (iii) with respect to each participant, the incentive compensation for achievement of threshold, target and maximum achievement levels and the relative weighting, if any, of each Performance Goal in determining the participant’s incentive compensation (if applicable) and (iv) a schedule setting forth the payout opportunity for threshold, target and maximum achievement levels (if applicable).
In addition to the Adjusted EBITDA Pool Goal, awards under the Incentive Plan may be made subject to the attainment of the following types of performance goals, which, where applicable, shall be within the meaning of Code Section 162(m) relating to one or more of the following business criteria:
earnings (either in aggregate or on a per-share basis) or adjusted earnings;
net income or adjusted net income;
return measures (including return on assets, investments, equity or invested capital);
total shareholder return (change in share price plus reinvestment of dividends into shares when declared, if any, from period to period) and other measures of shareholder return (including income applicable to common shareholders or other classes of shareholders);
earnings before or after either, or any combination of, interest, taxes, depletion, depreciation, amortization or other non-cash items;
reserves, total reserves or reserves per barrel;
present value of estimated future oil and natural gas revenues, net of estimated direct expenses, discounted at an annual discount rate of 10%, or PV 10;
reduction in expense levels in each case, where applicable, determined either on a Company-wide basis or in respect of any one or more subsidiaries or business units thereof;
economic value or economic value added;
market share or market share added;
annual net income to common stock;
earnings per share or growth in earnings per share;
annual cash flow provided by operations;
changes in annual revenues;
strategic and operational business criteria, consisting of one or more objectives based on specified revenue, market penetration, geographic business expansion goals, objectively identified project milestones, production volume levels, cost targets, lease operating expenses, G&A expenses, finding and development costs, reserves or reserves added, reserves replacement ratio and goals relating to acquisitions or divestitures; and/or
goals relating to specific environmental compliance measures and safety and accident rates.
Any Performance Goal may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Goal may include or exclude (i) extraordinary, unusual and/or non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases or (v) other similar occurrences. In all other respects, the Performance Goals shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles or under a methodology established by the Plan Committee which is consistently applied.
Certification and Level of Achievement
Within 60 days immediately following the end of the applicable Performance Period, the Plan Committee shall determine the awards to participants for such Performance Period by comparing actual performance to (i) the Adjusted EBITDA Pool Goal adopted by the Plan Committee for such Performance Period and (ii) at the Plan Committee’s discretion, any applicable Discretionary Goals. With respect to Covered Employees, the Plan Committee shall certify that the amount of the award has been accurately determined in accordance with the terms, conditions and limits of the Incentive Plan. The Plan Committee may, in its discretion, decrease the award to be paid to one or more participants for such Performance Period. However, the Plan Committee may not in any event increase the amount of an award payable to an individual above the maximum award payable.
Award Payment
Approved awards under the Incentive Plan for a Performance Period will be paid (a) if the Company’s fiscal year is a calendar year, then in the calendar year immediately following the close of the year in which such Performance Period ends, but in any event within 75 days following the Plan Committee’s certification of the award; or (b) if the Company’s fiscal year is other than a calendar year, then on the 135th day following the end of such Performance Period.
In addition, in the event of certain terminations of service due to death or disability prior to the end of the applicable Performance Period, the Plan Committee may, in its discretion, pay a participant a pro-rated amount of incentive compensation under such participant’s award. In the event of a Change in Control (as defined in the Incentive Plan) during a Performance Period, the Company will pay each participant a pro-rata amount of any potential incentive compensation payable under any award made to such participant, calculated by multiplying the amount payable for target achievement by the percentage of the Performance Period completed prior to the Change in Control.
The payment for an award shall be in the form of a cash lump sum payment.
Recoupment for Restatements
The Plan Committee may recoup all or a portion of any incentive compensation paid to a participant in the event of a restatement of the Company’s financial statements as set forth in the Company’s clawback policy, if any, as approved by the Board from time to time.
Plan Term and Amendment or Discontinuance
The effective date of the Incentive Plan is January 1, 2016, subject to approval by the shareholders at the Annual Meeting. The Incentive Plan will continue in effect until terminated by the Plan Committee or the Board. The Plan Committee may at any time and from time to time, without the consent of the participants, alter, amend, revise, suspend or discontinue the Incentive Plan in whole or in part; provided, however, that no amendment that requires shareholder approval in order for the Incentive Plan and awards to comply with any applicable law or the rules and regulations of any applicable stock exchange shall be effective unless such amendment shall be approved by the requisite vote of the shareholders of the Company entitled to vote thereon, and further provided that, any amendment that modifies any pre-established Performance Goal for a participant who is a Covered Employee (or his successor(s), as may be applicable) with respect to any particular Performance Period may only be effected on or prior to that date which is 90 days following the commencement of such Performance Period. In addition, the Board of Directors may discontinue the Incentive Plan in whole or in part and amend the Incentive Plan in any manner advisable in order for incentive compensation granted under the Incentive Plan to qualify as “performance-based” compensation under Code Section 162(m) (including amendments as a result of changes to Code Section 162(m) or the regulations thereunder to permit greater flexibility with respect to incentive compensation granted under the Incentive Plan).
Federal Income Tax Consequences
The following is a brief summary of certain federal income tax consequences relating to the transactions described under the Incentive Plan as set forth below. This summary does not purport to address all aspects of federal income taxation and does not describe state, local or foreign tax consequences. This discussion is based upon provisions of the Code and the treasury regulations issued thereunder, and judicial and administrative interpretations under the Code and treasury regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.
Law Affecting Deferred Compensation. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation, including, in some instances, incentive compensation. If the requirements of Code Section 409A are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax.
Tax Consequences to Participants. Generally, the recipient of cash will be subject to tax at ordinary income rates on the amount of the award on the date of payment or delivery. Any ordinary income realized by a participant upon receipt of cash is subject to withholding of federal, state and local income tax and to withholding of the participant’s share of tax under the Federal Insurance Contribution Act. Deferred compensation that is subject to Code Section 409A will be subject to certain federal income tax withholding and reporting requirements. Withholding does not represent an increase in the participant’s total income tax obligation, since it is fully credited toward his or her tax liability for the year.
Tax Consequences to the Company. To the extent that a participant recognizes ordinary income in the circumstances described above, the Company or a subsidiary of the Company for which the participant performs services will be entitled to a corresponding deduction; provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense and is not an “excess parachute payment” within the meaning of Code Section 280G and is not disallowed by the $1 million limitation on certain executive compensation under Code Section 162(m).
Section 162(m) Million Dollar Deduction Limit. The Company may not deduct compensation of more than $1 million that is paid to an individual who, on the last day of the taxable year, is a Covered Employee. The limitation on deductions does not apply to certain types of compensation, including qualified “performance-based” compensation. The Company intends that any incentive compensation paid under the Incentive Plan will be construed as to constitute qualified “performance-based” compensation and, as such, will be exempt from the $1 million limitation on deductible compensation. Although the Company generally will attempt to structure the incentive compensation under the Incentive Plan so as to preserve deductibility, there may be circumstances where the Company’s best interests may be best served by maintaining flexibility in the way compensation is provided even if it might result in the non-deductibility of incentive compensation awarded under the Incentive Plan.
Other Compensation
The Incentive Plan is not exclusive. The Company may pay other compensation to named executive officers and other key employees as authorized by the Board and applicable law. If the Incentive Plan is not approved by the shareholders, the Company intends to operate the pre-amended and restated version of the Incentive Plan, which is similar to the Incentive Plan, and the Company contemplates that any cash incentive payments for the Company’s fiscal year ending December 31, 2016 for named executive officers would not be deductible under Code Section 162(m) to the extent that (when combined with other non-exempt compensation paid) they exceed the $1 million limit on non-exempt compensation paid to the named executive officers.
Potential Payments to Named Executive Officers
The first awards granted under the Incentive Plan will relate to 2016. Based on the payout percentages approved by the Plan Committee, if the Adjusted EBITDA Pool Goal is met but not exceeded (i.e., if Adjusted EBITDA equals $50,000,000), the potential amounts payable to the named executive officers for 2016 under the Incentive Plan are as follows:
| | | | |
Name | | Potential Awards for 2016
Under the Incentive Plan | |
Joseph Wm. Foran | | $ | 525,000 | |
Matthew V. Hairford | | $ | 306,250 | |
David E. Lancaster | | $ | 306,250 | |
Craig N. Adams | | $ | 306,250 | |
Van H. Singleton, II | | $ | 306,250 | |
The potential payout amounts to the named executive officers may be greater if actual Adjusted EBITDA exceeds $50,000,000 for 2016. The Plan Committee may establish additional Discretionary Goals for 2016, in its discretion.
Vote Required
The affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting is required to approve the Incentive Plan. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Broker non-votes will be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.
The Board of Directors recommends that you vote FOR approval of the
Matador Resources Company Amended and Restated Annual Incentive Plan.
PROPOSAL 3 —2| ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The
In accordance with the requirements of Section 14A of the Exchange Act, the Company seeks a non-binding advisory vote from its shareholders to approve the compensation of its Named Executive Officers (as defined below) as described in this Proxy Statement.
As discussed under the “Executive Compensation — Compensation Discussion and Analysis” section of this Proxy Statement (“CD&A”), we
We believe the Company’s future success and the ability to create long-term value for our shareholders depends on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe that our success also depends on the continued contributions of our Named Executive Officers. The Company’s compensation system plays a significant role in its ability to attract, motivate and retain a
high qualityhigh-quality workforce. As described in
the CD&A, the Company’s compensation program for Named Executive Officers is designed to reward, in both the short term and the long term, performance that contributes to the implementation of our business strategies, maintenance of our culture and values and
the achievement of our objectives.
In addition, we reward qualities that we believe help achieve our business strategies such as:
individual performance in light of general economic and industry-specific conditions;
relationships with shareholders and vendors;
the ability to manage and enhance production from our existing assets;
the ability to explore new opportunities to increase oil and natural gas production;
the ability to identify and acquire additional acreage;
the ability to increase year-over-year proved reserves;
the ability to control unit production costs;
level of job responsibility;
general professional growth.
This proposal provides shareholders the opportunity to endorse or not endorse the Company’s executive compensation program through approval of the following resolution:
“Resolved, that the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and
related narrative discussion, is hereby approved.”
The above referencedabove-referenced CD&A disclosure appearsand accompanying disclosures appear on pages 43 to 5550-68 of this Proxy Statement.
Because this is an advisory vote, it will not be binding upon the Board. However, the Nominating, Compensation and Planning Committee
and the independent members of theIndependent Board (the “Independent Directors”) will take into account the outcome of the vote when considering future executive
compensation arrangements.
Vote Required
The affirmative vote of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is required to approve this resolution on a non-binding basis. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Broker non-votes will be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.
During our
20122018 Annual Meeting of Shareholders, our shareholders approved a non-binding, advisory proposal to hold
annual advisory votes to approve our executive
compensation.compensation every year. In consideration of the results of this advisory vote, the Board has
adopted amaintained its policy
of providing for annual advisory votes
to approve executive compensation. Pursuant to applicable rules, the Company is required to hold another advisory vote on
the frequency of future advisory votes to approve named executive
officer compensation at the 2024 Annual Meeting. Accordingly, Proposal 3 of this Proxy Statement seeks a non-binding advisory vote on the frequency of future advisory votes to approve named executive officer compensation. Unless the Board modifies
thisits current policy
after consideration of the results of the advisory vote under Proposal 3, the next advisory vote
onto approve executive compensation following this vote will be held at our
20172025 Annual
Meeting of Shareholders.Meeting.The Board of Directors recommends that you vote FOR approval of this resolution.
44Matador Resources Company | 2024 Proxy Statement
PROPOSAL 3
PROPOSAL 3| ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act, the Company seeks a non-binding advisory vote from its shareholders regarding the desired frequency for holding future advisory votes to approve the compensation of our Named Executive Officers as described in our annual proxy statements.
This proposal gives shareholders the opportunity to express their views as to whether future advisory votes to approve the Company’s Named Executive Officer compensation program should occur every year, every two years or every three years. Because this vote is advisory, it will not be binding upon the Board. However, the Board will take into account the outcome of the vote when deciding the frequency of future non-binding advisory votes on the Company’s named executive officer compensation.
The Board recommends that a non-binding advisory vote to approve the compensation of our executive officers as disclosed in the Company’s proxy statements continue to be held every year.
While the Board believes this recommendation is appropriate at this time, shareholders are not voting to approve or disapprove this recommendation, but are instead asked to provide an advisory vote on whether future non-binding advisory votes to approve the Company’s Named Executive Officer compensation should be held every year, every two years or every three years. The choice receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders, even if that choice does not receive a majority of the votes.
The Board of Directors recommends that you vote for “1 YEAR” on this proposal.
45Matador Resources Company | 2024 Proxy Statement
PROPOSAL 4 —| RATIFICATION OF THE APPOINTMENT OF KPMG LLP
The Audit Committee has appointed KPMG LLP (“KPMG”) as the independent registered public accounting firm of the Company for the year ending December 31,
2016,2024, and the Board has directed that such appointment be submitted to our shareholders for ratification at the Annual Meeting.
The
Company has been advised by KPMGAudit Committee concluded that
the firm has no relationship with the Company or its subsidiaries other than that arising from the firm’s engagementKPMG’s provision of non-audit services, such as
auditors.tax services, does not compromise KPMG’s independence.
If the shareholders do not ratify the appointment of KPMG, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so.
The Company has been advised that representatives of KPMG will be present at the Annual Meeting and will be available to respond to appropriate questions and make a statement if they desire to do so.
Fees of Independent Registered Public Accounting Firm for Fiscal Years
20152023 and
20142022
The following table presents fees for professional audit services rendered by KPMG for the audit of the Company’s annual financial statements for the years ended December 31,
20152023 and
2014,2022, and fees for other services rendered by KPMG during
that period: | | | | | | | | |
| | | 2015 | | | 2014 | |
Audit fees | | $ | 1,073,821 | | | $ | 879,850 | |
Audit-related fees | | | — | | | | — | |
Tax fees | | | — | | | | — | |
All other fees | | | — | | | | — | |
| | | | | | | | |
Total | | $ | 1,073,821 | | | $ | 879,850 | |
| | | | | | | | |
those periods:
| | | | | | | | |
| 2023 | 2022 |
| Audit fees | $ | 2,020,000 | | $ | 1,615,000 | |
| Audit-related fees | $ | 50,000 | | — | |
| Tax fees | $ | 420,000 | | $ | 170,000 | |
| All other fees | — | | — | |
| Total | $ | 2,490,000 | | $ | 1,785,000 | |
Services rendered by KPMG in connection with the fees presented above were as follows:
For fiscal year 2015,2023, audit fees consisted of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements includingand consultation on significant accounting matters. Audit fees also included fees paid to KPMG by San Mateo for inclusion in our prospectus related to our 2015 equity offering, our offering memorandum related to our 2015 senior notes offering and our prospectus related to our 2015 registered exchange offering, and providing the underwritersaudit of such offerings with comfort letters on certain information contained, or incorporated by reference, in the prospectus or offering memorandum, as applicable. their 2023 financial statements.
For fiscal year 2014,2022, audit fees consisted of fees associated with the audit of the Company’s consolidated financial statements, including the audit of the effectiveness of the Company’s internal control over financial reporting, required reviews of our quarterly condensed consolidated financial statements includingand consultation on significant accounting matters. Audit fees also included fees paid to KPMG by San Mateo for inclusion in our prospectusthe audit of its 2022 financial statements.
Audit-Related Fees
Audit-related fees for fiscal year 2023 related to
our 2014 equity offering,fees for assurance and
providing the underwriter of such offering with comfort letters on certain information contained, or incorporated by reference,related services for subsidiary audits that are not included in the
prospectus.Audit-Related Fees
audit fees listed above. We did not incur any audit-related fees in 2015 or 2014.
2022.
46Matador Resources Company | 2024 Proxy Statement
Tax Fees
We did not incur any
Tax fees for
fiscal years 2023 and 2022 related to permitted tax
advice, planning
and other services in 2015 or 2014.services.
We did not incur any other fees in
20152023 or
2014.2022.
The Audit Committee pre-approves all audit and permissible non-audit services provided by KPMG. These services may include audit services, audit-related services, tax services and other services. The Audit Committee has authorized the chair of the Audit Committee to pre-approve audit and permissible non-audit services provided by KPMG up to $750,000. Pursuant to this delegation, the decisions of the chair must be presented to the Audit Committee at its next meeting.
Report of the Audit Committee
We are a standing committee comprised of independent directors as currently defined by SEC regulations and the applicable listing standards of the NYSE. The Board has determined that at least one of the members of the Audit Committee is an “audit committee financial expert” as defined by applicable SEC rules and regulations. We operate under a written charter adopted by the Board. A copy of the charter is available free of charge on the Company’s website at
www.matadorresources.com under
“Investors — “Investor Relations—Corporate Governance.”
We annually select the Company’s independent registered public accounting firm. If the shareholders do not ratify the appointment of KPMG at the Annual Meeting, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so.
Management is responsible for the Company’s internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board
(the “PCAOB”) and issuing a report thereon. As provided in our charter, our responsibilities include the monitoring and oversight of these processes.
Consistent with our charter responsibilities, we have met and held discussions with management and the independent registered public accounting firm. In this context, management and the independent registered public accounting firm represented to us that the Company’s consolidated financial statements for the fiscal year ended December 31,
20152023 were prepared in accordance with U.S. generally accepted accounting principles. We reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm and discussed with the independent registered public accounting firm matters required to be discussed by
Auditing Standard No. 16, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the
Public Company Accounting Oversight Board in Rule 3200T.applicable requirements of the PCAOB and the SEC.
The Company’s independent registered public accounting firm has also provided to us the written disclosures and the letter required by applicable requirements of the
Public Company Accounting Oversight BoardPCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee, and we discussed with the independent registered public accounting firm that firm’s independence.
Based upon our reviews and discussions with management and the independent registered public accounting firm and our review of the representation of management and the report of the independent registered public accounting firm to the Audit Committee, we recommended that the Board include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31,
20152023 filed with the SEC.
William M.
Sepulveda, Jr.,Byerley, Chair
David
Reynald A. Baribault
Julia P. Forrester Rogers
James M.
LaneySteven W. Ohnimus
Don C. Stephenson
Howard
Timothy E. Parker
Susan M. Ward
47Matador Resources Company | 2024 Proxy Statement
The affirmative vote of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting is required for the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the year ending December 31,
2016.2024. If the shareholders do not ratify the appointment of KPMG, the Audit Committee will consider whether to engage a different independent registered public accounting firm but will not be obligated to do so. Abstentions will have the effect as a vote cast against the proposal.
The Board of Directors recommends that you vote FOR the ratification of the appointment
of KPMG as the Company’s independent registered public accounting firm for the
year ending December 31, 2016.2024.
PROPOSAL 5 — SHAREHOLDER PROPOSAL TO ADOPT A MAJORITY VOTING STANDARD FOR THE ELECTION OF DIRECTORS
The California State Teachers’ Retirement System (“CalSTRS”), a shareholder of the Company, has notified the Company that it intends to present the proposal and related supporting statement (which is quoted verbatim) set forth below for action by the shareholders at the Annual Meeting. Pursuant to Rule 14a-8(l)(1) of the Exchange Act, the Company will provide the address and number of shares of Common Stock held by the proponent of the proposal promptly upon receipt of an oral or written request. Requests should be submitted to
48Matador Resources Company Attention: Corporate Secretary, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240, email: investors@matadorresources.com or by calling (972) 371-5200.As explained in the Company’s opposition statement below, the Board recommends that you vote “AGAINST” this shareholder proposal.
BE IT RESOLVED:
That the shareholders|
2024 Proxy Statement
Dear Fellow Shareholders,
On behalf of
Matador Resources Company hereby request that the Board of Directors initiate the appropriate process to amend the Company’s articles of incorporation and/or bylaws to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders, with a plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats.SUPPORTING STATEMENT:
In order to provide shareholders a meaningful role in director elections, the Company’s current director election standard should be changed from a plurality vote standard to a majority vote standard. The majority vote standard is the most appropriate voting standard for director elections where only board nominated candidates are on the ballot, and it will establish a challenging vote standard for board nominees to improve the performance of individual directors and entire boards. Under the Company’s current voting system, a nominee for the board can be elected with as little as a single affirmative vote, because “withheld” votes have no legal effect. A majority vote standard would require that a nominee receive a majority of the votes cast in order to be re-elected and continue to serve as a representative for the shareholders.
In response to strong shareholder support a substantial number of the nation’s leading companies have adopted a majority vote standard in company bylaws or articles of incorporation. In fact, more than 94% of the companies in the S&P 500 have adopted majority voting for uncontested elections. We believe the Company needs to join the growing list of companies that have already adopted this standard.
CalSTRS is a long-term shareholder of the Company and we believe that accountability is of upmost importance. We believe the plurality vote standard currently in place at the Company completely disenfranchises shareholders and makes the shareholder’s role in director elections meaningless. Majority voting in director elections will empower shareholders with the ability to remove poorly performing directors and increase the directors’ accountability to the owners of the Company, its shareholders. In addition, those directors who receive the majority support from shareholders will know they have the backing of the very shareholders they represent. We therefore ask you to join us in requesting that the Board of directors promptly adopt the majority vote standard for director elections.
Please vote FOR this proposal.
OPPOSITION STATEMENT OF THE COMPANY:
The Board has considered the shareholder proposal and believes that the voting procedures currently set forth in the Company’s Amended and Restated Bylaws, as amended, are in the best interests of the Company and our shareholders. For the reasons discussed below, the Board recommends a vote “AGAINST” the shareholder proposal.
The adoption of a strict majority voting standard is unnecessary because the Company already maintains corporate governance processes that provide for the identification of qualified individuals to serve on the Board. As described below, the Company’s Shareholder Advisory Committee for Board Nominations (formerly the Director Nominating Advisory Committee) provides the Company a unique process for receiving shareholder input when selecting director candidates. The Nominating, Compensation and Planning Committee, with input from the Shareholder Advisory Committee for Board Nominations, identifies and considers potential director candidates and has also established procedures by which shareholders can recommend individuals to serve on the Board. The result of these processes is a Board composed of highly qualified directors with diverse skill sets, qualifications and experiences who serve the best interests of the Company and its shareholders.
The Company’s current nominating and voting procedures enable shareholders to express themselves in all phases of the nominating and voting process. As described above under “Corporate Governance — Board Committees — Nominating, Compensation and Planning Committee,” the Shareholder Advisory Committee for Board Nominations is charged with receiving and considering possible nominees for election by shareholders to the Board. The Shareholder Advisory Committee for Board Nominations is comprised of eight to 12 persons selected by the Nominating, Compensation and Planning Committee. All members of the Shareholder Advisory Committee for Board Nominations are shareholders, and a majority currently serve solely as shareholders, not being otherwise affiliated with the Company or the Board. Shareholders can also follow the procedures outlined in the Company’s Amended and Restated Bylaws, as amended, to nominate individuals to serve on the Board. Furthermore, shareholders can express opposition to any new director nominee or dissatisfaction with any incumbent director by withholding their vote in any election. A significant “withhold” vote for any director would send a strong message to the Board and would be strongly considered by the Nominating, Compensation and Planning Committee in determining future nominees for election to the Board.
In addition, the proponent’s suggestion that plurality voting allows a director nominee to be elected with a single affirmative vote is highly unlikely given the extraordinary levels of shareholder support all director candidates have historically received. Since the Company’s initial public offering, no director has received less than 99% of the votes cast for or withheld in a director election (excluding broker non-votes), meaning the outcome of all elections held to date would have been the same even under a majority voting standard. Given our historical results, all of our directors have very clearly had the backing of the shareholders they represent.
The Company’s plurality voting standard eliminates the possibility of “failed elections” where directors do not receive a majority of the votes cast, thus leaving vacancies on the Board. Multiple vacancies on the Board could result in the Company’s inability to comply with NYSE listing standards and securities regulations relating to director independence, committee composition and financial experts. Furthermore, in the event of a “failed election,” it is the Board’s responsibility to fill the vacancy without any further shareholder vote until the next upcoming shareholder meeting. Shareholders would have no greater assurance that the person or persons selected to fill any vacancy would be any more satisfactory than the failed nominee. Addressing “failed elections” would undoubtedly be distracting to the Board and require both the Board and the Nominating, Compensation Committee, thank you for your continued support of Matador and Planning Committeeentrusting us with your hard-earned capital. We continue to divert their attention from other important mattersbe grateful for the opportunities that we have had to visit with many of you, and repeat muchwe look forward to getting to know more of our shareholders in the process each had previously conducted in order to identify new nominees. Accordingly, the Board believes it is the best interests of the Company and its shareholders to maintain the plurality voting standard and avoid the potential corporate governance complications and administrative burdens that could arise out of a transition to a mandated majority voting standard.
A majority voting standard may also increase the difficulty of recruiting qualified director nominees and increase the Company’s costs without any improved performance by directors or increased accountability to shareholders. Conversely, a plurality voting standard ensures continuity of relevant expertise, advice and experience on the Board.
Importantly, under the Board’s leadership and with the backing of the Company’s shareholders, the Company has continued to deliver strong financial and operational results. Despite a challenging commodity price environment in 2015, the successful execution of the Company’s business strategies by the Company’sfuture.
The Board, management and staff ledare extremely pleased to significant increasescelebrate with you another outstanding year for Matador in 2023. Once again, we achieved a number of operational and financial successes across the Company. These achievements include record oil and natural gas production, increased efficiency in our operations, steadily decreasing costs and provedbetter-than-expected free cash flow. These record results could not have been achieved without a talented and hardworking team committed to increasing shareholder value through exploring and developing great oil and natural gas reservesassets. Our team continues to find ways to grow and improve both our upstream and midstream businesses and return value to our shareholders.
Of particular note, in
2015. Among other accomplishments,2023, we closed and successfully integrated the
Company achieved record oil, natural gas and average daily oil equivalent productionstrategic Advance Acquisition, which included approximately 18,500 net acres in
2015. The Company’s Adjusted EBITDA for 2015 was the
second best result in its history, surpassed only by the Company’s Adjusted EBITDA reported for 2014. The Company’s strong performance is, in no small part, attributable to the guidance and stewardshipcore of the
membersnorthern Delaware Basin, with approximately 99% of
the Board, allsuch acreage held by production. The Advance Acquisition provided a significant increase in our inventory in our core target formations and additional upside locations. This new acreage also provided further expansion opportunities for Pronto, our wholly-owned midstream subsidiary. The Advance Acquisition was just one of
whom have enjoyedapproximately 200 acquisitions and trades completed in 2023 located throughout Matador’s asset areas. As noted in the
strong support of the Company’s shareholders.Finally, Texas law expressly provides for plurality voting in director elections. While perhaps less commonplace for companies comprising the S&P 500, of which Matador is not a part, plurality voting is common practice among the Company’s peers. Of the companies constituting Matador’s 2016 peer group as identified below under “Executive Compensation — Compensation Discussion and Analysis” two-thirds have adopted that follows, in part as a plurality voting standardresult of these acquisitions, Matador is now the eighth largest producer by total production in New Mexico according to Enverus data. To successfully close and integrate these acquisitions requires excellent communication, hard work and dedication by every group at Matador.
The remarkable professionalism and teamwork by and between the various groups within Matador—led by our talented team of executives—made these exceptional results possible. Our Board has a “pay for directors. Ofperformance” philosophy and recognizes the companies constituting Matador’s 2015 peer group as identified below under “Executive Compensation — leadership of our executive officers in contributing to the Company’s achievements outlined above. We are particularly appreciative of the disciplined approach of our Board and executive team that has allowed us to continue to expand our strategic opportunities in both our exploration and production business and our increasingly important midstream businesses.
We look forward to ongoing dialogue with our shareholders and to demonstrating responsiveness to your feedback, including with respect to our executive compensation program. We are honored to serve on your behalf and hope you will join us at the 2024 Annual Meeting of Shareholders.
Sincerely,
| | | | | | | | |
| | |
| Timothy E. Parker | | R. Gaines Baty |
| Lead Independent Director | | Chair, Strategic Planning and Compensation Committee |
49Matador Resources Company | 2024 Proxy Statement
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
” a majority of the companies have adopted a plurality voting standard for directors. Therefore, Matador’s plurality voting standard is in line with its peers.Accordingly, the Board does not believe that moving to a majority voting standard will enhance the shareholders’ role in director elections in any meaningful way or will increase directors’ accountability to the shareholders.
Vote Required
The affirmative vote of the holders of a majority of the shares present in person or by proxy and entitled to vote at the Annual Meeting is required to approve the shareholder proposal. If you hold your shares through a broker and you do not instruct the broker how to vote, your broker will not have the authority to vote your shares. Abstentions will have the effect as a vote cast against the proposal. Broker non-votes will be counted as present for purposes of determining the presence of a quorum but will have no effect upon the outcome of the vote.
The Board of Directors recommends that you vote AGAINST approval of the
shareholder proposal to adopt a majority voting standard for the election of directors.
EXECUTIVE COMPENSATION
This Compensation Discussion and Analysis,
In this compensation discussion and analysis, we discuss our compensation objectives, our decisions and the rationale behind those decisions relating to compensation for 2015 for our principal executive officer, our principal financial officer and our other three most highly compensated executive officers. This compensation discussion and analysis or CD&A, provides a general description of our compensation program and specific information about its various components.
Named Executive Officers
Throughout this discussion,components for the following individuals are referred to as the “Named Executive Officers” and are included in the Summary Compensation Table:
for 2023: •Joseph Wm. Foran, Chairman of the Board and Chief Executive Officer;
Matthew V. Hairford, President;
David E. Lancaster,•Van H. Singleton, II, President—Land, Acquisitions & Divestitures and Planning;
•Brian J. Willey, Executive Vice President and Chief Financial Officer;
•Billy E. Goodwin, Former President—Operations;
•Craig N. Adams, Former Executive Vice President, — Land, Legal & Administration;Co-Chief Operating Officer, Chief of Staff and Corporate Secretary; and
•Michael D. Frenzel, Executive Vice President and Treasurer and Former Principal Financial Officer.
Mr. Frenzel served as the Company’s principal financial officer from March 31, 2022 to February 16, 2023. On February 16, 2023, Mr. Willey was promoted to Executive Vice President and Chief Financial Officer and assumed the role of Land
principal financial officer. Mr. Adams retired from his roles as the Company’s Executive Summary
We areVice President, Co-Chief Operating Officer and Corporate Secretary effective March 6, 2024, at which time Mr. Adams was no longer an independent energy company engagedexecutive officer of the Company, and from his role as Chief of Staff effective March 31, 2024. Mr. Goodwin retired from his role as the Company's President—Operations effective April 10, 2024, at which time Mr. Goodwin was no longer an executive officer of the Company, and is expected to continue to serve as an employee of the Company through April 30, 2024.
2023 Highlights
The successful execution of our business strategies, including the Advance Acquisition, led to increases in the exploration, development, production and acquisition ofour oil and natural gas resources in the United States, with an emphasis onproduction and proved oil and natural gas shalereserves in 2023. We also improved the capital efficiency of our drilling and other unconventional plays. Our currentcompletion operations are focused primarily onand achieved several key operational milestones throughout the oil and liquids-richyear, as further described below. In addition, we achieved several key capital resources objectives during the year, including generating free cash flow, paying down a portion of the Wolfcampborrowings that funded the Advance Acquisition, increasing our quarterly cash dividend and Bone Spring playsearning performance incentives from Five Point. Further, we completed several important financing transactions in 2023, including the issuance of the 2028 Notes, increasing the elected borrowing commitment and the borrowing base under our Credit Agreement and increasing the lender commitments under the San Mateo Credit Facility. San Mateo also achieved important milestones in 2023, including the addition of produced water disposal capacity and being awarded new customer contracts. These actions increased our operational flexibility and opportunities while preserving the strength of our balance sheet and our liquidity position.
Advance Acquisition
Our strong financial position at the start of 2023, including over $500 million of cash, allowed us to take advantage of a unique and strategic opportunity to acquire Advance. The Advance Acquisition added acreage in the core of the northern Delaware basin, including in our core and upside target formations, and provided further expansion opportunities for Pronto, our wholly-owned midstream subsidiary serving that area in Lea County, New Mexico. The Advance Acquisition was only one of approximately 200 acquisitions and trades we completed during 2023. These transactions and their associated midstream systems were located throughout Matador’s asset areas and continue to build and connect Matador’s core Delaware Basin acreage.
50Matador Resources Company | 2024 Proxy Statement
Record Operational and Financial Results
The year ended December 31, 2023 was marked by record operational and financial results across the Company. San Mateo also had a record year in Southeast New Mexico2023, including increased throughput volumes for natural gas gathering and West Texas. We also operate inprocessing, oil gathering and transportation and water handling, as well as our second highest annual net income and record Adjusted EBITDA (a non-GAAP financial measure). The charts below show the Eagle Ford shale play in South Texasfive-year growth experienced by both our exploration and production business and our midstream business.
TOTAL OIL EQUIVALENT PRODUCTION (MMBOE)
TOTAL PROVED OIL
EQUIVALENT RESERVES (MMBOE)
THIRD-PARTY MIDSTREAM SERVICES REVENUES ($ millions)
For the
Haynesville shale and Cotton Valley plays in Northwest Louisiana and East Texas. In addition, we have a growing midstream business that supports our operations.2015 Business Highlights
In 2015,year ended December 31, 2023, we achieved record oil, natural gas and average daily oil and natural gas equivalent production. In 2023, we produced 27.5 million Bbl of oil, an increase of 26%, as compared to 21.9 million Bbl of oil produced in 2022. We also produced 123.4 Bcf of natural gas, an increase of 24% from 99.3 Bcf of natural gas produced in 2022. Our average daily oil and natural gas equivalent production for the year ended December 31, 2023 was 131,813 BOE per day, including 75,457 Bbl of oil per day and 338.1 MMcf of natural gas per day, an increase of 25%, as compared to 105,465 BOE per day, including 60,119 Bbl of oil per day and 272.1 MMcf of natural gas per day, for the year ended December 31, 2022. The increase in oil and natural gas production was primarily attributable to the Advance Acquisition and our ongoing delineation and development drilling activities in the Delaware Basin throughout 2023, which offset declining production in the Eagle Ford shale. Oil production comprised 57% of our total oil and natural gas production (using a conversion ratio of one Bbl of oil per six thousand cubic feet of natural gas) for each of the years ended December 31, 2023 and 2022.
51Matador Resources Company | 2024 Proxy Statement
During 2023, we achieved all five significant and important operational milestones in the Delaware Basin that we had set at the beginning of the year. These five operational milestones were each achieved when we turned to sales:
•eight Rodney Robinson wells in the first half of 2023;
•eight Stateline wells in the first half of 2023;
•21 Ranger wells on properties acquired in the Advance Acquisition in the second half of 2023, which was the largest single batch development project in our history;
•17 Stebbins wells in the second half of 2023; and
•13 Wolf wells in the second half of 2023, including our first two “U-Turn” two-mile lateral wells.
In addition to achieving these five key operational milestones, further operational achievements in the Delaware Basin in 2023 included:
•continued drilling of longer laterals, with an average completed lateral length for operated wells turned to sales in 2023 of approximately 9,800 feet; and
•D/C/E capital expenditures for 2023 of $1.16 billion, which was below our estimated range for 2023 D/C/E capital expenditures of $1.18 to $1.32 billion as provided on February 21, 2023, and was in the middle of the revised estimated range of $1.10 to $1.22 billion, as provided on July 25, 2023.
Capital Resources and Financing Highlights
In addition to record financial results, we successfullyreturned value to shareholders through the generation of free cash flow and increases to our quarterly dividend. We also completed several important financing transactions in 2015, including2023 that increased our operational flexibility while preserving the strength of our balance sheet and improved our liquidity position.
52Matador Resources Company | 2024 Proxy Statement
Highlights of these value-generating items include:
•The generation of free cash flow in all four quarters of 2023.
•The amendment of our dividend policy in the fourth quarter of 2023, pursuant to which we increased the quarterly cash dividend from $0.15 per share of Common Stock to $0.20 per share of Common Stock.
•The receipt of $38.2 million in performance incentives directly from Five Point in 2023.
•The issuance of $500.0 million in aggregate principal amount of our 2028 Notes.
•The revision of our Credit Agreement at our spring and fall redetermination processes to collectively (i) increase the HEYCO Merger, which added substantiallyborrowing base to $2.50 billion, as compared to $2.25 billion at December 31, 2022, (ii) increase the elected borrowing commitment to $1.325 billion, as compared to $775.0 million at December 31, 2022, (iii) increase the maximum facility amount to $2.00 billion, as compared to $1.50 billion at December 31, 2022 and (iv) add two new banks to our Delaware Basin acreage position,lending group.
•The amendment of the San Mateo Credit Facility in October 2023 to (i) increase the lender commitments from $485.0 million to $535.0 million and (ii) add a new bank to San Mateo’s lending group.
ESG Highlights
During 2023, we also continued to improve our first issuanceESG performance and enhance our ESG disclosures. Among other items, our ESG achievements included the following:
•The continued decrease in per-barrel emissions, including a reduction in direct greenhouse gas emissions intensity from 2019 levels, increased use of senior unsecured notes, (iii) a follow-on equity offeringnon-fresh water, including recycled water, and (iv)increased transportation of oil and water by pipeline.
•Approximately 22,000 hours of employee continuing education, equating to approximately 59 hours per employee in 2023, and management’s continued focus on risk management and cybersecurity, including quarterly reports by executive management to the sale of a portionAudit Committee.
•The publishing of our midstream assetsannual Sustainability Report in Loving County, Texas to an affiliate of EnLink. October 2023, which provides Matador’s stakeholders and interested parties with a standardized platform for evaluating the Company’s recent performance and future progress.
53Matador Resources Company | 2024 Proxy Statement
Compensation Program Objectives
Our Board has a “pay for performance” philosophy and recognizes the leadership of
Mr. Foran and our executive officers in contributing to the Company’s
success in 2015. Highlights of our 2015 success are summarized in the table below:
Objectives of Our Compensation Program
achievements. Our future success and the ability to create long-term value for our shareholders dependsdepend on our ability to attract, retain and motivate highly qualified individuals in the oil and natural gas industry. Additionally, we believe thatIn furtherance of these goals, our success also depends on the continued contributions of our Named Executive Officers. Our executive compensation program is designed to provide a comprehensive compensation program to meet the following key objectives:
•to be fair to both the executive and the Company;Company and be competitive with comparable positions at companies in our peer group;
•to attract and retain talented and experienced executives within light of the skills necessaryintense competition for us talent in our industry and areas of operation, including from peers and larger industry competitors;
•to execute our business plan;
to provide opportunities to achieve a total compensation level that is competitive with comparable positions at companies with which we may compete for executives;
to align the interests of our executive officersexecutives with the interests of our shareholders and with the performance of our Company for long-term value creation;
•to provide financial incentives to our executives to achieve our key corporate and individual objectives;
to provideobjectives with an appropriate mix of fixed and variable pay components to maintain a “pay-for-performance” oriented compensation program;
;•to foster a shared commitment among executives by coordinating their corporate and individual goals; and
•to provide compensation that takes into consideration the education, professional experience, knowledge, commitment and knowledgededication that is specific to each job and the unique qualities each executive possesses.
54Matador Resources Company | 2024 Proxy Statement
2023 Say-on-Pay Results
At our 2023 Annual Meeting, support for our executive compensation program remained strong with 96% approval. The Compensation Committee took this support into account as one of many factors it considered in connection with the discharge of its responsibilities in exercising its judgment in establishing and overseeing our executive possesses;compensation arrangements throughout the year.
Compensation Program Best Practices
| | | | | | | | | | | |
| What We Do: | | What We Don't Do: |
| ✓ | We pay for performance—approximately 80% of our CEO’s target total compensation for 2023 was variable and at risk, with approximately 50% performance-based | × | We do not permit hedging of Company stock |
| ✓ | We maintain robust stock ownership guidelines for officers | × | We do not gross-up excise taxes for severance or change in control payments |
| ✓ | We engage an independent compensation consultant | × | We do not guarantee bonuses |
| ✓ | We use competitive benchmarking in setting compensation | × | We do not reprice stock options without shareholder approval |
| ✓ | We conduct annual risk assessments of compensation practices | × | We have no defined benefit or supplemental executive retirement plans |
| ✓ | We conduct regular shareholder engagement to gather feedback on compensation practices | × | We do not allow pledging of Company stock, except in limited circumstances |
| ✓ | We hold an annual say-on-pay vote | × | We do not pay dividends on phantom units, restricted stock units (“RSUs”) or performance stock units (“PSUs”) |
| ✓ | We maintain a clawback policy | × | We do not pay dividends on unvested restricted stock, which accumulate and only settle once the underlying shares have vested |
Impact of COVID-19 and
to recognize an executive’s commitment and dedication in his job performance and in support of our culture.
What Related Items on Our Compensation Program Is DesignedPrograms
We made significant changes to
RewardOurour executive compensation program is designedin 2020 in response to reward, in both the short termCOVID-19 pandemic and the long term, performance that contributes tosudden decline in oil prices, including reductions in base salaries. Additionally, even though each of the implementation of our business strategies, maintenance of our culture and values andIndependent Board-approved metrics under the achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies such as teamwork, individual performance in light of general economic and industry-specific conditions, relationships with shareholders and vendors,Company's annual cash incentive plan (the "Cash Incentive Plan") were met or exceeded, the ability to manage and enhance production from our existing assets, the ability to explore new opportunities to increase oil and natural gas production, the ability to identify and acquire additional acreage, the ability to increase year-over-year proved reserves, the ability to control unit production costs, level of job responsibility, industry experience and general professional growth.
How We Determined Each Element of 2015 Compensation
The Nominating, Compensation and Planning Committee has engaged Pay Governance LLC as its independentCompany's executive compensation advisory firm. The Nominating, Compensation and Planning Committee has assessed the independence of Pay Governance LLC pursuant to applicable SEC and NYSE rules and concluded that Pay Governance LLC’s engagement by the Nominating, Compensation and Planning Committee does not raise any conflict of interest.
For purposes of benchmarking executive compensation, for the 2014 fiscal year, Pay Governance LLC developed a list of recommended peer companies in the oil and natural gas exploration and production sector with comparable revenue size (approximately $90 million to approximately $775 million) and market capitalization (less than $1 billion to approximately $3.1 billion) and that were competitors. These companies and the rationale for their inclusion in our peer group were considered and approved by the Nominating, Compensation and Planning Committeeofficers and the Independent Directors. The Nominating, Compensation and
Planning CommitteeBoard agreed that the executive officers would forego receiving any 2020 annual cash bonuses. As commodity prices improved in 2021, we shifted our executive compensation program to more closely resemble our 2019 executive compensation program prior to the decline in oil prices in 2020 and the Independent Directors reviewedCOVID-19 pandemic. As such, peer group with respectour executive officers received increases in their base salary, increases in the grant date fair values for long-term equity awards and annual cash bonuses for 2021 and 2022. These changes to 2015our compensation program in 2021 and determined that2022 corresponded to our performance as the Company’s stock price hit a low of $1.11 in March 2020 and then recovered to close at $36.92 on December 31, 2021 and continued to increase to close at $57.24 on December 30, 2022. During 2023, prices for oil were slightly lower, averaging $77.60 per Bbl, and prices for natural gas were significantly lower, averaging $2.66 per MMBtu over the year. Despite lower commodity prices, Matador’s stock price remained strong, closing at $56.86 per share at December 29, 2023. As such, peer group should remainour compensation program in place2023 did not materially differ from our compensation program in 2022. Mr. Foran’s total compensation for 2015. The2023 decreased approximately 11% as compared to his total compensation peer companies for 2015 are as follows (the “Peer Group”):
| | |
Abraxas Petroleum Corporation
Approach Resources Inc.
Bonanza Creek Energy, Inc.
Callon Petroleum Company
Carrizo Oil & Gas, Inc.
Clayton Williams Energy, Inc.
Comstock Resources, Inc.
| | Contango Oil & Gas Company
Goodrich Petroleum Corporation
Magnum Hunter Resources Corporation
Penn Virginia Corporation
Resolute Energy Corporation
Rex Energy Corporation
Rosetta Resources Inc.
|
As an overall compensation philosophy for 2015, we increased Named Executive Officer base salaries to meet the objective of having2022. Mr. Foran’s average annual total compensation for the Named Executive Officers range between the 50th and 75th percentiles of the Peer Group.
three years ended December 31, 2023 was approximately $8.7 million.
55Matador Resources Company | 2024 Proxy Statement
Elements of Our 20152023 Compensation Program
Our executive compensation program places a considerable amount of an executive’s compensation at risk in the form of incentive or equity-based compensation, which can be variable from year to year. We also seek to provide an appropriate balance between annual incentives and
Why We Paid Each Elementlong-term incentives to ensure that each executive is motivated to consider longer-term Company performance in preference to short-term results.
For
2015,2023, our management compensation program was comprised of the following
fiveprimary elements:
| | | | | | | | |
| 2023 Element | •Key Features | Why We Include This Element |
| Base Salary | Base Salary. We paid base salary to compensate•Fixed level of cash compensation
| •Compensates each executive for his assigned responsibilities, experience, leadership and expected future contribution.contributions |
| Annual Cash Incentive Payments | •Variable, annual, performance-based cash compensation | | Performance-Based Cash Bonus. We adopted the 2012 Annual Incentive Plan effective January 1, 2012 as part of our management compensation program because we believed this element of compensation (i) helps focus•Focuses and motivatemotivates management to achieve key corporate and individual objectives by rewarding the achievement of these objectives; (ii) helps retain management; (iii) rewards our successes •Rewards achievements over the prior year; and (iv) is necessary to be competitiveyear
|
| Phantom Units / Restricted Stock | •Approximately 50% of targeted total long-term equity award value •Vests ratably in annual installments over three years from a total remuneration standpoint. |
| grant date • | | Discretionary Bonus. Our Independent Directors have discretionary authority to award executives for particular accomplishments at times andPhantom Units settle in amounts that the Independent Directors approve, upon the recommendationcash•Restricted Stock reflect issued shares of the Nominating, CompensationCompany's Common Stock
| •Directly aligns executive and Planning Committee.shareholder interests by tying the cash received on settlement to the Company’s stock price •Retains executives over vesting period •Cash settlement of Phantom Units avoids dilution of Common Stock •Restricted Stock increases overall stock ownership |
| Performance Stock Units | •Approximately 50% of targeted total long-term equity award value •Vests between 0% and 200% following a three- year performance period ending December 31, 2025 based on the Company’s ranking of relative total shareholder return as compared to our peers •If absolute total shareholder return is negative, payout is capped at target (100%) | | Equity Awards. We used stock options and restricted stock as•Focuses executives on the primary vehicles for (i) linking ourCompany’s long-term performance and increases inas award is tied to the Company’s total shareholder valuereturn relative to the total compensationshareholder return of its peers over a three-year performance period •Settlement in shares of the Company’s stock increases alignment between executives and shareholders •Retains executives over vesting period
|
| Severance and Change of Control Benefits | •Specified severance pay and benefits are provided under each Named Executive Officer’s employment agreement in connection with termination events, including after a change in control
| •Provides an incentive for our executive officers;executives to remain with the Company despite the uncertainties of a potential or actual change in control •Provides a measure of financial security in the event an executive’s employment is terminated without cause |
| Other Benefits | •Broad-based 401(k) retirement, employee stock purchase plan and (ii) providing competitive compensation to attract and retain our executive officers. |
| • | | Benefits. We offered a variety of health and welfare programsbenefits offered to all eligible employees including the Named Executive Officers. The health and welfare programs were intended to protect
| •Provides market competitive benefits •Protects employees against catastrophic loss and encourageencourages a healthy lifestyle.lifestyle |
Nominating,
56Matador Resources Company | 2024 Proxy Statement
Consistent with our compensation program objectives, we provide our executive officers with a significant portion of their total compensation in the form of variable, rather than fixed, compensation. Importantly, a significant portion of total compensation is also performance-based. The percentages shown below reflect each executive’s target compensation opportunity determined by the Compensation Committee and Planningthe Independent Board and do not reflect actual payments made to the executives for 2023.
2023 CEO Target Compensation(1)
2023 Average Other NEO Target Compensation(1)(2)
(1) Includes approximately 79% variable pay with approximately 50% performance based.
(1) Includes approximately 77% variable pay with approximately 50% performance based. Mr. Willey was granted restricted stock rather than PSUs.
(2) Mr. Frenzel omitted given his transition from the acting principal financial officer role to Executive Vice President and Treasurer effective February 16, 2023.
Role of the Independent Board, Compensation Committee
and Management
The Nominating, Compensation Committee annually evaluates each of the Company’s executive officers, including Mr. Foran, and Planningrecommends to the Independent Board the proposed compensation structure for each of the executives, including salary, equity and non-equity incentive compensation. Based on such recommendations, the Independent Board sets Mr. Foran’s compensation each year. Mr. Foran consults with and provides recommendations to the Compensation Committee hasand Independent Board regarding the authority, at our expense,compensation structure for each of the other Named Executive Officers. Based on the recommendations of the Compensation Committee and Mr. Foran, the Independent Board sets the other Named Executive Officers’ compensation each year. The members of the Independent Board are required to retainbe independent pursuant to the listing standards of the NYSE and terminate independent third-partythe rules and regulations promulgated by the SEC.
As part of their annual evaluations, the Compensation Committee:
•conducts an analysis of the Company’s annual performance relative to any performance criteria or targets established under the the Cash Incentive Plan and recommends to the Independent Board the amount of final annual cash incentive awards;
•reviews and recommends the form of and number of shares to be awarded pursuant to long-term incentive compensation consultantsawards, including vesting terms, performance metrics, performance peer groups and other expert advisors.material provisions of such awards;
•reviews executive officer compensation levels as compared to the Company’s peers;
•reviews and recommends any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof; and
•reviews and recommends any deferred compensation arrangement, retirement plan, other benefits and perquisites.
57Matador Resources Company | 2024 Proxy Statement
In addition, the
Nominating, Compensation
and Planning Committee confirms at least annually that our
incentive pay doescompensation policies and practices do not encourage unnecessary risk taking and reviews
and discusses the relationship between risk management,
policies and practices, corporate strategy and
senior executive compensation. The
Nominating, Compensation
and Planning Committee
considered,considers, in establishing and reviewing our
executive compensation program, whether the program encourages unnecessary or excessive risk taking and has concluded that it does
not. Severalnot and is not reasonably likely to have a material adverse effect on us. Many features of our program reflect sound risk management practices. Base salaries are fixed in amount and thus do not encourage risk taking. While
our bonusesannual cash incentive payments are tied to management’s achievements during the
previousapplicable fiscal year,
and may encourage the taking of short-term risks at the expense of long-term results, executives’ annual bonusesthey also take into account multiple performance criteria based on the executive’s individual
performance and are within the discretion of the Independent Directors. The Nominating,Board, with payout limits for each participant. Thus, the Compensation and Planning Committee believes that our bonusannual cash incentive awards appropriately balance risk and the desire to focus executives on specific short-term goals important to the Company’s success, and that they do not encourage unnecessary or excessive risk taking. In addition, the Nominating, Compensation and Planning Committee believes that our current equity compensation program provides an appropriate balance between the goals of increasing the price of our Common Stock and avoiding potential risks that could threaten our growth and stability due to the fact that stock optionsthe phantom units and service-based restricted stock typicallyPSUs vest over three or four years.
With regard to all ofyears and the Named Executive Officers, the Nominating, CompensationPSUs vest based on our relative total shareholder return, with an overall payout limit and Planning Committee recommends to the Independent Directors:
optiona further limit if absolute total shareholder return is negative. We also maintain policies prohibiting hedging and pledging (except in limited circumstances) and stock ownership guidelines and size of overall grants;
option grants and other equity and non-equity related awards; and
limitations, restrictions and conditions upon any award asa clawback policy, which we believe further mitigate the Nominating, Compensation and Planning Committee deems appropriate and as permitted under the applicable plan.
potential for unnecessary or excessive risk taking.The Independent Directors are required to be independent
In addition, pursuant to
its charter, the
listing standards of the NYSE and the rules and regulations promulgated by the SEC and are “outside directors” under Section 162(m) of the Code. Upon Mr. Stephenson’s appointment to the Board in 2015, the Board determined that Mr. Stephenson met the independence requirements of the NYSE and SEC but did not meet the definition of an “outside director” under Section 162(m) of the Code. As a result, Mr. Stephenson has recused himself from any Section 162(m)-related votes of the Board.The Nominating, Compensation and Planning Committee annually reviews and makes recommendations to the Independent Directors regarding the matters related to Mr. Foran’s compensation, including corporate goals and objectives applicable to Mr. Foran’s compensation. The Nominating, Compensation and Planning Committee also evaluates Mr. Foran’s performance in light of these established goals and objectives at least annually. Based upon these evaluations, the Nominating, Compensation and Planning Committee makes recommendations to the Independent Directors regarding Mr. Foran’s annual compensation, including salary, bonus and equity and non-equity incentive compensation. The Nominating, Compensation and Planning Committee reviews and recommends to the Independent Directors with regard to Mr. Foran:
any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof;
any deferred compensation arrangement or retirement plan or benefits; and
any benefits and perquisites.
On an annual basis, after consultation with Mr. Foran, the Nominating, Compensation and Planning Committee reviews and makes recommendations to the Independent Directors on the evaluation process and compensation structure for the other Named Executive Officers. After considering the evaluation and recommendations of Mr. Foran, the Nominating, Compensation and Planning Committee evaluates the performance of the other Named Executive Officers and makes recommendations to the Independent Directors regarding the annual compensation of such Named Executive Officers, including salary, bonus and equity and non-equity incentive compensation. The Nominating, Compensation and Planning Committee also takes into account the outcome of the most recent advisory vote from its shareholders when considering executive compensation arrangements.
After considering the recommendations of Mr. Foran with regard to the other Named Executive Officers, the Nominating, Compensation and Planning Committee reviews and recommends to the Independent Directors regarding the other Named Executive Officers:
any employment agreement, severance agreement, change in control agreement or provision or separation agreement or amendment thereof;
any deferred compensation arrangement or retirement plan or benefits; and
any benefits and perquisites.
In addition, pursuant to its charter, the Nominating, Compensation and Planning Committee reviews and recommends to the Independent DirectorsBoard any proposals for the adoption, amendment, modification or termination of our incentive compensation, equity-based plans and non-equity based plans.
2015
Role of the Independent Compensation Consultant
The Compensation Committee has engaged Meridian Compensation Partners, LLC ("Meridian") as its independent executive compensation advisory firm. Meridian provides assessments of the competitiveness of the Company’s executive compensation levels and practices relative to relevant executive labor markets and performs other tasks as requested by the Compensation Committee. For 2023, the Compensation Committee assessed the independence of Meridian pursuant to applicable SEC and NYSE rules and concluded that Meridian’s engagement by the Compensation Committee did not raise any conflicts of interest.
Use of Peer Group Market Data
Our independent compensation consultant benchmarks the pay levels of our officers against a group of competitor companies in the oil and natural gas exploration and production sector (the “Peer Group”). In connection with its annual review, the Compensation Committee and Independent Board adopted the following Peer Group in 2023, which was used in setting 2023 compensation levels:
| | | | | |
| APA Resources Corp. | Marathon Oil Corp |
| Callon Petroleum Co. | Ovintiv Inc. |
| Coterra Energy Inc. | PDC Energy Inc |
| Diamondback Energy Inc. | Permian Resources Corp. |
| Magnolia Oil & Gas Corp. | SM Energy Co. |
In addition to considering companies in the oil and natural gas exploration and production sector, the Compensation Committee also considered company size characteristics such as assets, enterprise value and market value when approving the Peer Group. The Peer Group also includes certain companies with operations in the Permian Basin that face similar opportunities and challenges that we face. For 2023, the Compensation Committee removed Vital Energy in consideration of the size of its market capitalization relative to that of the Company and added APA Resources Corp. to the 2023 Peer Group given the comparable size of its market capitalization. As of December 31, 2023, the Peer Group had a median market capitalization of $7.4 billion, compared to the Company’s market capitalization of $6.8 billion at such date, placing the Company at the 46th percentile of the Peer Group.
58Matador Resources Company | 2024 Proxy Statement
The Peer Group is used by the Compensation Committee and the Independent Board in setting Named Executive Officer salaries, annual cash incentive award opportunities, long-term incentive awards and target total direct compensation levels. The Compensation Committee and Independent Board use this data to inform their pay decisions as one data point among many others, including Company performance, individual performance, experience and responsibilities, leadership and professional growth.
The Compensation Committee recommended, and the Independent Board approved, effective January 1, 2023, the base salary levels for the Named Executive Officers as set forth below.
| | | | | | | | |
| Executive Officer | 2022 Base Salary(1) | 2023 Base Salary |
| Joseph Wm. Foran | $ | 1,350,000 | | $ | 1,350,000 | |
| Van H. Singleton, II | $ | 750,000 | | $ | 800,000 | |
| Brian J. Willey | $ | — | | $ | 600,000 | |
| Billy E. Goodwin | $ | 750,000 | | $ | 800,000 | |
| Craig N. Adams | $ | 750,000 | | $ | 800,000 | |
| Michael D. Frenzel | $ | 450,000 | | $ | 450,000 | |
(1) Information is not provided for Mr. Willey for 2022 as he was not a Named Executive Officer in 2022.
The Independent Board determined that the base salary levels for each of the Named Executive Officers effective January 1, 2023 were warranted based upon each Named Executive Officer’s individual contributions to, among other items:
•the Company’s operational performance during 2022, including record annual oil, natural gas and average daily oil equivalent production;
•the Company’s financial performance during 2022;
•the Company’s stock price during 2022;
•the Company’s continued improvement in operational efficiencies;
•the Company’s continued focus on improvement in its ESG initiatives and disclosure of such initiatives; and
•the continued growth of the Company’s midstream business throughout 2022.
59Matador Resources Company | 2024 Proxy Statement
2023 Annual Cash Incentive Compensation
The Company’s 2023 annual cash incentive compensation was awarded pursuant to the Cash Incentive Plan, which is designed to link executive decision making and performance with the Company’s goals, reinforce these goals and ensure the highest level of accountability for the success of the Company as a whole. The Cash Incentive Plan advances Company and shareholder interests by providing an additional means to (i) sustain and enhance the culture of personal commitment on the part of executives, select managers and key employees in the continued growth, development and financial success of the Company and (ii) encourage them to remain with, and devote their best efforts to, the Company. The Cash Incentive Plan provides for the granting of incentive compensation awards that may be paid to a participant upon satisfaction of specified performance goals for a particular performance period. In late 2014, basedaddition, the Cash Incentive Plan provides that the Compensation Committee and Independent Board may make adjustments for individual executive officers for exceptional performance and attainment of certain enumerated strategic goals (the “Strategic Objectives Adjustment”).
Performance Goals
For 2023, the chair of the Compensation Committee met with Mr. Foran and certain members of the executive management team to review and discuss potential criteria for the performance goals. Based on these meetings, the chair of the Compensation Committee proposed certain preliminary performance goal categories for consideration for 2023 to the full Compensation Committee. The Compensation Committee then met with our executive management team to review the proposed performance goal categories. As a result of these discussions, and upon the recommendation of the Compensation Committee, the Independent Board determined to use the following threshold, target and maximum performance goals for 2023, which were each achieved at or above the maximum level, as shown below:
| | | | | | | | | | | | | | | | | | | | |
| 2023 Performance Goals | Threshold | Target | Maximum | Actual Results | Assessment | |
Net Debt/Adjusted EBITDA(1)(2)(3) | 1.2x | 1.0x | 0.8x | 0.9x | Exceeded Target | |
| Adjusted operating costs per BOE, excluding interest ($/BOE) | $15.75 | $14.75 | $13.75 | $12.83 | Exceeded Maximum | |
| Return on Average Capital Employed (ROACE) | 26% | 30% | 34% | 34% | Achieved Maximum | |
| Total Shareholder Return vs. Peer Group | — | Upper 50% | Upper 25% | Upper 50% | Achieved Target | |
Environmental, Social and Governance (ESG)(4) | — | — | — | — | — | (5) |
(1)Adjusted EBITDA is a non-GAAP financial measure included herein solely as a reference point under the Cash Incentive Plan. It is commonly used by similar companies in our industry. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Matador’s net income (loss) and net cash provided by operating activities, see Annex A to this Proxy Statement.
(2)As a reference point under the Cash Incentive Plan, Net Debt as of December 31, 2023 is calculated as (i) $1.2 billion in senior notes outstanding, plus (ii) $552.3 million in debt under the Credit Agreement, including outstanding borrowings and letters of credit, less (iii) $52.7 million in available cash. The increase in Net Debt in 2023 as compared to 2022 was primarily attributable to the Advance Acquisition.
(3)Attributable to Matador Resources Company shareholders after giving effect to those values attributable to third-party non-controlling interests, including in San Mateo.
(4)Based on a qualitative assessment of the Company’s overall progress in its ESG-related efforts, including with respect to enhancements to public disclosures, and a review of the Company’s performance in the areas of environmental stewardship, safety processes and procedures, training of personnel, risk management, cybersecurity and diversity and inclusion.
(5)Among other items, the Compensation Committee and Independent Board noted the continued publication of the Company’s annual Sustainability Report, the continued reduction of per-barrel emissions, the meaningful use of non-fresh water, including recycled water, the increased transportation of operated produced water and operated produced oil by pipeline, the number of training hours conducted by Company personnel and management’s continued focus on risk management and cybersecurity, including quarterly reports by executive management to the Audit Committee.
60Matador Resources Company | 2024 Proxy Statement
In addition to setting the 2023 performance goals outlined above, the Compensation Committee also identified certain annual financial and strategic achievements to be considered by the Compensation Committee and the Independent Board in connection with the assessment of the performance of the Named Executive Officers during 2023 and the Strategic Objectives Adjustment component for 2023. These additional factors included:
•Adjusted Free Cash Flow(1) of $460 million;
•percentage of oil production growth of 26%;
•reserves growth to 460 MMBOE;
•drilling and completions cost per foot of $1,075;
•lease operating expenses per BOE of $5.06;
•San Mateo Adjusted EBITDA(2) of $200 million; and
•the completion of numerous quality acreage, mineral and midstream transactions, including the Advance Acquisition.
(1)Adjusted Free Cash Flow is a non-GAAP financial measure included herein solely as a reference point under the Cash Incentive Plan. It is commonly used by similar companies in our industry. For a definition of Adjusted Free Cash Flow and a reconciliation of Adjusted Free Cash Flow to Matador’s net cash provided by operating activities, see Annex A to this Proxy Statement.
(2)Adjusted EBITDA is a non-GAAP financial measure included herein solely as a reference point under the Cash Incentive Plan. It is commonly used by similar companies in our industry. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to San Mateo’s net income and net cash provided by operating activities, see Annex A to this Proxy Statement.
2023 Incentive Opportunities
In making recommendations regarding potential 2023 annual cash incentive opportunities for our Named Executive Officers, the Compensation Committee reviewed Meridian’s recommendations and the recommendations of Mr. Foran
(other than with regard to his base salary), the Nominating, Compensation and Planning Committee recommended and the Independent Directors approved the following 2015 base salaries for our Named Executive Officers, except with respect to Mr. Singleton, who was not appointed as an executive officer until February 2015. Mr. Singleton’s 2015 base salary was ratified, approved and confirmed by the Nominating, Compensation and Planning Committee and the Independent Directors in connection with his appointment as an executive officer. | | | | |
Executive Officer | | 2015 Base
Salary | |
Joseph Wm. Foran | | $ | 800,000 | |
Chairman of the Board and Chief Executive Officer | | | | |
| |
Matthew V. Hairford | | $ | 500,000 | |
President | | | | |
| |
David E. Lancaster | | $ | 425,000 | |
Executive Vice President and Chief Financial Officer | | | | |
| |
Craig N. Adams | | $ | 425,000 | |
Executive Vice President — Land, Legal & Administration | | | | |
| |
Van H. Singleton, II | | $ | 325,000 | |
Executive Vice President of Land | | | | |
The base salaries of the Named Executive Officers were set between the 50th and 75th percentiles of base compensation levels of the Peer Group based on compensation set forth in the Peer Group’s 2014 proxy statements.
2015 Annual Incentive Compensation
Effective January 1, 2012, we adopted the 2012 Annual Incentive Plan, pursuant to which we may award Named Executive Officers annual incentive compensation cash awards based on certain terms and conditions established by the Board. We set annual performance criteria each year for the Named Executive Officers based on the performance criteria that are set forth in the 2012 Annual Incentive Plan (each, an “Annual Incentive Program”). Such criteria include financial, operational and strategic performance goals for the Company, Company performance measures and Company performance relative to peers. These performance criteria have corresponding performance payment amounts that serve as guidelines for actual amounts to be paid based on the achievement of such performance criteria by each Named Executive Officer.
In addition to the annual performance criteria, in order to give the Nominating, Compensation and Planning Committee and the Independent Directors flexibility, the Nominating, Compensation and Planning Committee has the discretion to make recommendations to the Independent Directors and the Independent Directors have the discretion to decide after the completion of each year to decrease the amount of the payments relating to the corresponding performance criteria or to increase the amount of the payments to the Named Executive Officers. Any increase could be in response to unforeseen circumstances when the performance criteria were set. Any such
increase could be or not be based on the list of performance criteria set forth in the Annual Incentive Program and could be made irrespective of whether any payments were made based upon the performance criteria.
For 2015, the Chair of the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management to determine potential criteria for the 2015 Annual Incentive Program (the “2015 Incentive Program”).regarding proposed target opportunities. Based on these meetings, the Chair proposed certain preliminary performance criteria metrics for consideration by the Nominating, Compensation and Planning Committee. The Nominating, Compensation and Planning Committee then met with Pay Governance and management tosuch review, the proposed criteria. As a result of these meetings, the Nominating, Compensation and Planning Committee recommended and the Independent Directors determined to use the following performance criteria as guidelines:
increase in oil production for 2015 as compared to 2014;
increase in total production for 2015 as compared to 2014;
decrease in cash operating costs for 2015 as compared to 2014.
| • | | Adjusted EBITDA(1)growth for 2015 as compared to 2014;
|
| • | | debt/Adjusted EBITDA(1) ratio for 2015 as compared to 2014;
|
increase in stock price for 2015 as compared to 2014; and
increase in Permian Basin acreage for 2015 as compared to 2014.
The Nominating, Compensation and Planning Committee and the Independent Directors determined that these seven criteria were general measures of our performance and were the key criteria on which management should focus during 2015. The Independent Directors established the threshold levels of the performance criteria as representing an achievable improvement over 2014, the target levels as representing a considerable but reasonable improvement over 2014 and the maximum levels as representing an exceptional improvement over 2014. Since the actual payments to be made under the 2015 Incentive Program were discretionary with the Independent Directors, there was no weighting among the performance criteria. Below are the threshold, target and maximum performance criteria set for 2015, as well as the Company’s actual results.
2015 Incentive Program Metrics
| | | | | | | | | | |
Performance Metric | | 2014 Baseline | | Threshold | | Target | | Maximum | | 2015 Actual |
Oil Production | | 3.3 million Bbl | | 4.0 million Bbl | | 4.1 million Bbl | | 4.3 million Bbl | | 4.5 million Bbl |
Total Production (million BOE) | | 5.9 million BOE | | 8.0 million BOE | | 8.3 million BOE | | 8.6 million BOE | | 9.1 million BOE |
Cash Operating Costs(2) | | $19.88/BOE | | $18.00/BOE | | $17.00/BOE | | $16.00/BOE | | $15.79/BOE |
Adjusted EBITDA (1) | | $262.9 million | | $200.0 million | | $215.0 million | | $230.0 million | | $223.2 million |
Year End Debt/Adjusted EBITDA | | 1.3 | | 2.2 | | 2.0 | | 1.8 | | 1.5 |
Stock Price/Share | | $20.23 | | $22.50 | | $26.00 | | $30.00 | | $19.77 |
Year-End Permian Basin Acreage (Net) | | 66,100 | | 66,100 | | 90,000 | | 100,000 | | 88,800 |
(1) | We define Adjusted EBITDA as earnings before interest expense, income taxes, depletion, depreciation and amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains and losses, certain other non-cash items and non-cash stock-based compensation expense, and net gain or loss on assets sales and inventory impairment. Adjusted EBITDA is a non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, see our Annual Report on Form 10-K for the year ended December 31, 2015. |
(2) | Includes production taxes and marketing, lease operating and general administrative expenses. Does not include interest expense. |
In making recommendations regarding the potential payment guidelines under the 2015 Incentive Program, Pay Governance LLC made recommendations regarding the target payment guidelines. The Nominating, Compensation and Planning Committee reviewed the Pay Governance LLC recommendations regarding target payment guidelines as well as the recommendations of management regarding the threshold, target and maximum payment guidelines. Based on the review of the Pay Governance recommendations and the management recommendations, which took into account the differing responsibilities of each Named Executive Officer byand Peer Group data, where available, for bonus levels for comparable positions, the Nominating,2023 target annual incentive opportunities for each of our Named Executive Officers were as set forth below. Such opportunities, as a percentage of base salary, remain unchanged from 2022 target opportunities.
| | | | | |
| Participant | 2023 Target Annual Incentive Opportunity as % of 2023 Base Salary |
| Joseph Wm. Foran | 100% |
| Van H. Singleton, II | 100% |
| Brian J. Willey | 100% |
| Billy E. Goodwin | 100% |
| Craig N. Adams | 100% |
| Michael D. Frenzel | 100% |
The maximum award opportunity for Mr. Foran was capped at 200%, for Messrs. Singleton, Willey, Goodwin and Adams was capped at 175% and for Mr. Frenzel was capped at 150%, in each case, prior to application of the Strategic Objectives Adjustment. Our Independent Board also determined to cap the Strategic Objectives Adjustment for each of Messrs. Foran, Singleton, Willey, Goodwin and Adams at 30% and for Mr. Frenzel at 25% of such Named Executive Officer’s total 2023 annual cash incentive payment.
61Matador Resources Company | 2024 Proxy Statement
2023 Performance Results
The Compensation Committee then assessed the Company’s 2023 results in light of the performance goals, annual financial and strategic achievements and the following individual performance milestones for each Named Executive Officer when determining appropriate annual cash incentive award amounts:
| | | | | |
| Named Executive Officer | Individual Performance Milestones |
Joseph Wm. Foran Chairman and Chief Executive Officer | •Collaborated with the Board and other executive officers to create and maintain an effective team culture throughout each level of Matador’s organization building value through (1) traditional oil and natural gas operations growing organically through the drill bit, (2) expanding midstream operations in Matador’s various asset areas and (3) selective acreage acquisitions •Directedthe origination, negotiation, closing and integration ofthe Advance Acquisition •Provided direction and leadership throughout Matador in developing and executing Matador’s strategy and operational plan, which resulted in record operational and financial results and free cash flow during each quarter of 2023 •Provided leadership to the Board on various matters, including with respect to acquisitions, drilling plans and returning value to shareholders through our steadily increasing fixed dividend •Guided the collaborative management of the Company’s balance sheet and improvement of the Company's already strong financial position through strategic financing transactions •Led firmwide focus on attracting, training and retaining talent and encouraging employee leadership development and director engagement •Aligned our strategy and operational plan throughout the organization by effectively communicating to directors, staff, shareholders and the public •Directed efforts to develop and maintain positive relationships with directors, shareholders, vendors and other key stakeholders with the assistance of other executive officers |
Van H. Singleton, II President - Land, Acquisitions and Divestitures and Planning | •Oversaw the Company’s land, land administration and acquisition & development activities, including over 200 acquisitions completed in 2023 •Led the negotiation, execution and closing of the Advance Acquisition •Coordinated business development activities and opportunities •Directed efforts to develop and maintain positive relationships with potential business partners and create pipeline of acquisition and divestiture opportunities •Served as Chairman of San Mateo through September of 2023 |
Brian J. Willey Executive Vice President and Chief Financial Officer | •Served as Chief Financial Officer of the Company and led the collective effort to manage the Company's balance sheet and improve the Company's already strong financial position through: ◦The issuance of $500.0 million in aggregate principal amount of 6.875% senior notes due 2028 ◦The revision of our Credit Agreement to, among other items, increase the elected borrowing commitment by $550.0 million to $1.325 billion and add two new banks to our lending group ◦The amendment of the San Mateo Credit Facility to increase the lender commitments from $485.0 million to $535.0 million and add a new bank to San Mateo’s lending group •Coordinated and oversaw the general financial matters of the Company through the management of the Company’s finance staff •Shared primary responsibility for investor conferences and non-deal roadshows with Mr. Foran |
62Matador Resources Company | 2024 Proxy Statement
| | | | | |
Billy E. Goodwin Former President - Operations | •Led the Company’s collaborative drilling, completions and production activities, managing approximately $1.16 billion of capital expenditures in 2023 related to the Company’s operations in its primary operating areas, resulting in record total oil and natural gas production in 2023 •Coordinated the successful operational integration of the assets acquired in the Advance Acquisition •Led Matador’s continuing improvement in capital efficiency as demonstrated by ◦D/C/E capital expenditures for 2023 of $1.16 billion, which was below our estimated range for 2023 D/C/E capital expenditures of $1.18 to $1.32 billion as provided on February 21, 2023, and was in the middle of the revised estimated range of $1.10 to $1.22 billion, as provided on July 25, 2023 ◦Continued drilling of longer laterals, with average completed lateral length for operated wells turned to sales in 2023 of approximately 9,800 feet •Continued focus on increasing efficiency and innovation, including successfully implementing "simul-frac" operations, 100% dual-fuel utilization on Matador completed wells and successful execution on our first two "U-turn" two-mile lateral wells |
Craig N. Adams Former Executive Vice President, Co-Chief Operating Officer, Chief of Staff and Corporate Secretary | •Shared Chief Operating Officer responsibilities and acted as chief administrative officer •Coordinated and oversaw the general legal matters of the Company through the management of the Company’s legal staff, including corporate governance and Board functions •Directed efforts to attract, train and retain talent and oversaw the Company’s human resource activities •Responsible for coordinating administrative functions of the Company, including interaction with management, office facilities and departmental efficiencies •Helped advance the Company’s ESG initiatives |
Michael D. Frenzel Executive Vice President, Treasurer, and Former Principal Financial Officer | •Served as treasurer of the Company and primary financial officer of San Mateo throughout 2023 as well as principal financial officer of the Company until February of 2023 •Managed the Company’s treasury, financial planning and forecasting, budgeting, capital markets, hedging, financial reporting and investor relations activities |
Additionally, the Compensation Committee performed a qualitative assessment of the Company’s ESG record for the year. Among other items, the Compensation Committee and
Independent Board noted the
Independent Directors,continued publication of the
threshold, targetCompany’s annual Sustainability Report, the continued reduction of per-barrel emissions, the meaningful use of non-fresh water, including recycled water, increased transportation of operated produced water and
maximum payment guidelines set forth below were adopted. | | | | | | | | | | | | |
Participant | | Threshold
Annual
Incentive
Opportunity
as % of 2015
Base Salary | | | Target
Annual
Incentive
Opportunity
as % of 2015
Base Salary | | | Maximum
Annual
Incentive
Opportunity
as % of 2015
Base Salary | |
Joseph Wm. Foran | | | 40 | % | | | 75 | % | | | 150 | % |
Chairman of the Board and Chief Executive Officer | | | | | | | | | | | | |
| | | |
Matthew V. Hairford | | | 35 | % | | | 70 | % | | | 125 | % |
President | | | | | | | | | | | | |
| | | |
David E. Lancaster | | | 35 | % | | | 65 | % | | | 120 | % |
Executive Vice President and Chief Financial Officer | | | | | | | | | | | | |
| | | |
Craig N. Adams | | | 25 | % | | | 50 | % | | | 100 | % |
Executive Vice President — Land, Legal & Administration | | | | | | | | | | | | |
| | | |
Van H. Singleton, II | | | 25 | % | | | 50 | % | | | 100 | % |
Executive Vice President of Land | | | | | | | | | | | | |
Pursuantoperated produced oil by pipeline, the number of training hours conducted by Company personnel and management’s continued focus on risk management and cybersecurity, including quarterly reports by executive management to the 2015 Incentive Program,Audit Committee.
In assessing performance under the
amountStrategic Objectives Assessment, the Compensation Committee reviewed the individual performance milestones listed above as well as additional individual contributions to the achievement of
anythe Company-wide performance goals and certain annual
award could have been greater or less thanfinancial and strategic achievements. Based on this review, the
payment opportunity based on the performance criteria guidelines so long as the annual award did not exceed 200%Compensation Committee determined that each of the Named Executive
Officer’s annual base salary.In January 2016, after reviewingOfficers performed at a high level in 2023 in contributing to the Company’s 2015 expected results comparedsuccess and that the individual contributions of Mr. Willey, in particular, to the financial and operational metrics set forth above,achievement of these goals exceeded expectations.
63Matador Resources Company | 2024 Proxy Statement
Based on such assessment, the
Nominating, Compensation
and Planning Committee concluded that the Company would (i) achieve the maximum performance metrics for oil production, total production, cash operating costs and year end debt/Adjusted EBITDA, (ii) exceed the target performance metric for Adjusted EBITDA and (iii) nearly meet the target performance metric for year-end Permian Basin acreage.With regard to each Named Executive Officer, after taking into account the performance criteria guidelines, the Company’s 2015 results and other information with regard to such Named Executive Officer, the Nominating, Compensation and Planning Committee recommended to the Independent Directors thatBoard the Named Executive Officers be paid annual cash awards as set forthlisted below for each Named Executive Officer under the Cash Incentive Plan, including Strategic Objectives Adjustments equal to 15% for each of Messrs. Foran, Goodwin, Singleton, Adams and theFrenzel and 30% for Mr. Willey. The Independent DirectorsBoard approved such annual cash awards. The Independent Directors exercised their discretion in awarding the amounts of annual cash awards, under the 2015 Incentive Program set forth below. Since the actual payments to be made under the 2015 Incentive Program were discretionary with the Independent Directors, there was no formulaic calculation nor weighting among the performance criteria by the Independent Directors. All awards made pursuant to the 2015 Incentive Program were cash awards andwhich were paid to the Named Executive Officers in the first quarter of 2016.
| | | | | | | | |
Executive Officer | | 2015 Incentive
Program
Compensation | | | % of 2015
Base Salary | |
Joseph Wm. Foran | | $ | 1,080,000 | | | | 135.0 | % |
Chairman of the Board and Chief Executive Officer | | | | | | | | |
| | |
Matthew V. Hairford | | $ | 563,000 | | | | 112.6 | % |
President | | | | | | | | |
| | |
David E. Lancaster | | $ | 470,000 | | | | 110.6 | % |
Executive Vice President and Chief Financial Officer | | | | | | | | |
| | |
Craig N. Adams | | $ | 385,000 | | | | 90.6 | % |
Executive Vice President — Land, Legal & Administration | | | | | | | | |
| | |
Van H. Singleton, II | | $ | 295,000 | | | | 90.8 | % |
Executive Vice President of Land | | | | | | | | |
Discretionary Bonuses
Our Independent Directors have discretionary authority to award executives for particular accomplishments at times and in amounts thatFebruary 2024.
| | | | | | | | | | | |
| Named Executive Officer | Target Award Payable for 2023 | Maximum Award Payable for 2023 | Actual Award for 2023 |
| Joseph Wm. Foran | $1,350,000 | $3,510,000 | $3,105,000 |
| Van H. Singleton, II | $800,000 | $1,820,000 | $1,610,000 |
| Brian J. Willey | $600,000 | $1,365,000 | $1,365,000 |
| Billy E. Goodwin | $800,000 | $1,820,000 | $1,610,000 |
| Craig N. Adams | $800,000 | $1,820,000 | $1,610,000 |
| Michael D. Frenzel | $450,000 | $843,750 | $776,250 |
2023 Long-Term Incentive Compensation
In February 2023, the Independent
Directors approve, upon the recommendationBoard granted awards of 50% service-based cash-settled phantom units and 50% share-settled PSUs to Messrs. Foran, Singleton, Goodwin and Adams and approximately 50% share-settled PSUs and approximately 50% service-based restricted shares of Common Stock that vest in equal annual tranches over three years from grant to Messrs. Willey and Frenzel. Messrs. Willey and Frenzel received restricted shares of Common Stock rather than cash-settled phantom units in order to increase their ownership of the
Nominating, Compensation and Planning Committee. In the first and second quarters of 2015, the Nominating, Compensation and Planning Committee recommended, and the Board approved, discretionary bonuses to certain of our Named Executive Officers in recognition of each officer’s efforts in connection with the HEYCO Merger and the Company’s 2015 senior notes offering and public equity offering, respectively.2015 Long-Term Incentive Compensation
Effective January 1, 2012, the Board adopted the 2012 Long-Term Incentive Plan. The Board and shareholders approved the Amended and Restated 2012 Long-Term Incentive Plan (the “2012 Plan”) effective as of June 10, 2015. This plan permits the granting ofCompany's Common Stock. These long-term equity and cash incentive awards including the following:
stock appreciation rights;
restricted stock (service-based and performance-based);
restricted stock units (service-based and performance-based);
After receiving recommendations from the Nominating, Compensation and Planning Committee, the Independent Directors administer the 2012 Plan. For 2015, the Nominating, Compensation and Planning Committee met with Pay Governance LLC and management regarding the appropriate types and amounts of equity grants based on differing levels of responsibility of the Named Executive Officers and made recommendations to the Independent Directors.
In January 2015, the Nominating, Compensation and Planning Committee recommended, and the Independent Directors awarded, the annual equity awards of non-qualified stock options and/or restricted stock to each Named Executive Officer. The stock options and restricted stock were granted in order to facilitate retention of our Named Executive Officers, and provide a reward forincentivize positive future results. The January 2015 stock options have a five-year term, vest 100% onresults and further align the third anniversaryinterests of the grant date if the Named Executive Officer is still employed by us on the vesting date, and have an exercise price of $22.01 per share. The January 2015 restricted stock awards vest 100% on the third anniversary of the grant date if the Named Executive Officer is still employed by us on the vesting date. During the restricted period prior to vesting of the restricted stock, the Named Executive Officer will be eligible to receive dividends on and vote the restricted stock.
In connection with the HEYCO Merger, in January 2015, the Nominating, Compensation and Planning Committee also recommended, and the Independent Directors awarded, a one-time equity grant of stock options to Mr. Foran effective upon closing of the HEYCO Merger. These stock options have a five-year term, vest 100% on the third anniversary of the grant date if Mr. Foran is still employed by us on the vesting date, and have an exercise price of $21.66 per share.
In April 2015, the Nominating, Compensation and Planning Committee also recommended, and the Independent Directors awarded, one-time equity grants of stock options and/or restricted stock to our Named Executive Officers in connection with those of the Company’s April 2015 senior notes offering and public equity offering.shareholders. The April 2015 stock options have a five-year term, vest 50% ontable below provides the second and 50% on the fourth anniversarieskey terms of the grant date if theFebruary 2023 equity awards for our Named Executive Officer is still employed by us on the vesting dates, and have an exercise price of $27.72 per share. Officers:
| | | | | | | | |
| Key Terms | Phantom Units / Restricted Stock | Performance Stock Units |
| Targeted percentage of total award value | 50% | 50% |
| Vesting terms | Three years ratably on each anniversary | Following three-year performance period ending December 31, 2025 |
| Performance metric | N/A | Relative total shareholder return, with payout capped at target if absolute total shareholder return is negative |
The
April 2015 restricted stock vests 100% on the third anniversary of the grant date if the Named Executive Officer is still employed by us on the vesting date. During the restricted period prior to vesting of the restricted stock, the Named Executive Officer will be eligible to receive dividends on and vote the restricted stock.The approximate value of the 2015 equity grants as a percentage of 2015 base salary and the number of shares underlying each grant and the target value of the 2023 annual equity grants are set forth in the table below:
| | | | | | | | | | | | |
Participant | | % of 2015
Base Salary | | | Stock
Options | | | Restricted Stock | |
Joseph Wm. Foran | | | 448 | % | | | 361,022 | | | | — | |
Chairman of the Board and Chief Executive Officer | | | | | | | | | | | | |
| | | |
Matthew V. Hairford | | | 136 | % | | | 68,739 | | | | — | |
President | | | | | | | | | | | | |
| | | |
David E. Lancaster | | | 114 | % | | | 33,922 | | | | 6,179 | |
Executive Vice President and Chief Financial Officer | | | | | | | | | | | | |
| | | |
Craig N. Adams | | | 114 | % | | | 33,922 | | | | 6,179 | |
Executive Vice President — Land, Legal & Administration | | | | | | | | | | | | |
| | | |
Van H. Singleton, II | | | 117 | % | | | 29,390 | | | | 3,902 | |
Executive Vice President of Land | | | | | | | | | | | | |
2016
| | | | | | | | | | | |
| Named Executive Officer | Phantom Units / Restricted Stock | Target Performance Stock Units | Targeted Value |
| Joseph Wm. Foran | 30,000 | 20,000 | $3,800,000 |
| Van H. Singleton, II | 15,000 | 10,000 | $1,900,000 |
| Brian J. Willey | 8,000 | 6,000 | $1,000,000 |
| Billy E. Goodwin | 15,000 | 10,000 | $1,900,000 |
| Craig N. Adams | 15,000 | 10,000 | $1,900,000 |
| Michael D. Frenzel | 8,000 | 3,500 | $850,000 |
64Matador Resources Company | 2024 Proxy Statement
The Independent Board approved the total targeted value for the year for each Named Executive Officer and then converted that value into an approximate aggregate number of units based on the closing price of our Common Stock on the date prior to the date of grant. The units were then granted 50% in the form of phantom units or restricted stock, as applicable, and 50% in the form of PSUs (at target). The PSU equity component provides for settlement of between 0% and 200% of the total target PSUs subject to the award based on our total shareholder return relative to the total shareholder return of the Peer Group
over a three-year performance period from January 1, 2023 through December 31, 2025. If our absolute total shareholder return over such performance period is negative, no more than 100% of the PSUs may vest. The applicable percentage of vested units is shown below with respect to each percentile ranking and results are interpolated for results between the various rankings shown below.
| | | | | |
| Company’s Relative Total Shareholder Return Percentile Ranking | Percentage of Target PSUs That Will Vest |
| 0 | 0% |
| 10th | 20% |
| 20th | 40% |
| 30th | 60% |
| 40th | 80% |
| 50th | 100% |
| 60th | 120% |
| 70th | 140% |
| 80th | 160% |
| 90th | 180% |
| 100th | 200% |
In
late 2015, Pay Governance LLC recommended that, givenconnection with its annual review, the Compensation Committee and Independent Board updated the peer group for purposes of the 2023 PSU grants. The peer group used for determination of the Company’s relative
size, performance, industry focus and other factors, the Nominating, Compensation and Planning Committee and Independent Directors consider adopting a new peer group for 2016. The recommended peer companies consisted of companies in the oil and natural gas exploration and production sector with comparable revenue size (approximately $280 million to approximately $1.7 billion) and market capitalization ($1.3 billion to approximately $4.3 billion) and that were competitors. These companies and the rationale for their inclusion in our peer group were considered and approved by the Nominating, Compensation and Planning Committee and the Independent Directors. The compensation peer companies for 2016 aretotal shareholder return is as follows:
| | | | | |
| APA Resources Corp. | | Ovintiv Inc. |
CarrizoCallon Petroleum Co.
| PDC Energy Inc |
| Coterra Energy Inc. | Permian Resources Corp. |
| Diamondback Energy Inc. | SM Energy Co. |
Magnolia Oil & Gas Inc.DiamondbackCorp.
| SPDR S&P OIL & GAS EXP & PR |
| Marathon Oil Corp | Alternate: Earthstone Energy, Inc. Energen Corp.
EP Energy Corporation
Gulfport Energy Corp.
* |
| Laredo Petroleum, Inc.
Parsley Energy, Inc.
PDC Energy, Inc.
RSP Permian, Inc.
*To be substituted in the event that one of the peer group members for purposes of the 2023 PSU grants is acquired during the performance period and removed from the peer group. |
Vesting of 2021 Performance Stock Units
The PSU awards granted to the Named Executive Officers in June 2021 vested on December 31, 2023 based on the percentile level at which the total shareholder return to the Company’s stockholders over the three-year period ending December 31, 2023 stood in relation to the total shareholder return realized for that period by each member of a group of peer companies established by the Board at the time of the grant of the awards. In accordance with the terms of the award agreements governing the awards, each of Oasis Petroleum, Inc., Cimarex Energy Co. and Parsley Energy, Inc. had been acquired during the period and were removed from the 2021 peer group and excluded from the relative total shareholder return calculation for the vesting of the 2021 PSUs. Based on our performance and after such adjustments, the Company’s total shareholder return percentile ranking was at the 89th percentile and the PSUs vested at 178% of target.
65Matador Resources Company | 2024 Proxy Statement
We offer a variety of health and welfare programs to
all eligible employees, including the Named Executive Officers. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, pharmacy, dental, disability and life insurance. We also have a 401(k) plan for
all full timeeligible employees, including the Named Executive Officers,
into which we contribute 3% of the employee’s
base salaryeligible compensation, which is subject to limits established by the U.S. Internal Revenue Code of 1986, as amended (the “Code”), and have the discretion to contribute up to an additional 4% of the employee’s
base salaryeligible compensation as a dollar-for-dollar
match ofmatching contribution with respect to his or her elective deferral contributions. The discretionary dollar-for-dollar match is subject to vesting based upon years of service to the
Company.Company and the limits on the compensation that may be considered under the Code. In addition, we provide long-term care insurance for certain of our executive officers.
How Elements of Our Compensation Program Are Related to Each Other
We view the various components of compensation as related but distinct with generally a significant portion of total compensation reflecting “pay for performance.” We do not have any formal or informal policies or guidelines for allocating compensation between long-term
Severance and
currently paid out compensation or between cash or non-cash compensation.Accounting and Tax Considerations
Under Section 162(m) of the Code, a limitation is placed on tax deductions of any publicly-held corporation for individual compensation to certain executives of such corporation exceeding $1.0 million in any taxable year, unless the compensation is performance-based. However, due to the transition rules of Section 162(m), the $1.0 million deduction limit will not apply to us until the first meeting of our shareholders that occurs after the close of the third calendar year following the calendar year in which our initial public offering occurred, which was February 2012. Thus, Section 162(m) of the Code applies to awards granted under the 2012 Annual Incentive Plan (amended and restated as the Incentive Plan) on or after June 9, 2016.
Termination of EmploymentSeparation Arrangements
Employment Agreements
As described under “Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table,” in contemplation of our initial public offering, on August 9, 2011, we
We have entered into employment agreements with
Messrs. Foran, Hairford and Lancaster. In March 2014, we entered into an employment agreement with Mr. Adams in substantially the same form as thateach of
Messrs. Foran, Hairford and Lancaster, andin February 2015 we entered into an employment agreement with Mr. Singleton in substantially the same form as that of Mr. Adams. The principal difference in Mr. Adams’ and Mr. Singleton’s employment agreements as compared to the employment agreement of Messrs. Foran, Hairford and Lancaster is that Mr. Adams’ and Mr. Singleton’s agreements do not include a “modified single trigger” that would have allowed them to receive a “change in control” payment if they terminated their agreements without “good reason” within 30 days prior to or 12 months after a change in control.
our Named Executive Officers. Under the employment agreements, if a termination of employment occurs pursuant to one of the following occurs:
events: •the Named Executive Officer dies;
•the Named Executive Officer is totally disabled;
•we mutually agree to end the employment agreement;
•we dissolve and liquidate; or
•the term of the employment agreement ends,
we will pay the Named Executive Officer the average of his annual
cash bonus, which includes non-equity incentive compensation, for the prior two years, pro-rated based on the number of complete or partial months completed during the year of termination.
Also, under the employment agreements, if one of the following occurs:
•the Named Executive OfficerOfficer’s employment is terminated other than (i) as set forth above, (ii) by us for just cause or (iii) in connection with a “change in control” as described below; or
•the Named Executive Officer (other than Messrs. Willey and Frenzel) terminates his employment for “good reason,”
if the Named Executive Officer is
then, (i) for Mr. Foran, we will pay him twice his base salary and twice the average of his annual
cash bonus for the prior two years;
if the Named Executive Officer is(ii) for Messrs.
Hairford, Lancaster,Singleton, Willey, Goodwin or Adams
or Singleton, we will pay him 1.5 times his base salary and 1.5 times the average of his annual
cash bonus for the prior two years; and (iii) for Mr. Frenzel, we will pay him one-half of his base salary and one-half of the average of his annual cash bonus for the prior two years.
Finally, under the employment agreementsagreement of Messrs.Mr. Foran, Hairford and Lancaster, upon a “changewhich was entered into in control” and2011, if we terminate Mr. Foran within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate a Named Executive Officercontrol” without just cause or the Named Executive OfficerMr. Foran terminates his employment with or without “good reason,”reason” during such period, we will pay him three times his base salary and three times the average of his annual cash bonus for the prior two years. These agreements wereThis agreement was entered into prior to our initial public offering. At that time, we believed a “single trigger” or “modified single trigger” was appropriate given the Company’s size, early stage of development and strong growth aspirations. Since that time, however, we have ceased to use “modified single triggers” in executive employment agreements, and we intend to exclusively use “double triggers” going forward, as we have since 2014. The agreementagreements entered into with Mr.Messrs. Singleton, Willey, Goodwin, Adams in March 2014 and the agreement entered into with Mr. Singleton in February 2015, however,Frenzel, each include a “double trigger” such that upon a “change in control” andif we terminate either executive within 30 days prior to the “change in control” or within 12 months after the “change in control,” if we terminate themcontrol” without just cause or they terminate theirhe terminates his employment with “good reason,” we will makepay Messrs. Singleton, Willey, Goodwin and Adams three times his base salary and three times the same required payments.average of his annual cash bonus for the prior two years and Mr. Frenzel two times his base salary and two times the average of his annual
66Matador Resources Company | 2024 Proxy Statement
cash bonus for the prior two years. In addition, if
Messrs. Foran, Hairford, Lancaster, Adams or Singletonany of our Named Executive Officers are terminated or terminate their employment as set forth above in connection with a “change in control,” all equity awards of such Named Executive Officer vest immediately prior to such termination.
“Change
For definitions of “change in
control” is defined under Section 409A of the Code as follows:a change in ownership of the Company occurs on the date that, except in certain situations, results in someone acquiring more than 50% of the total fair market value or voting power of the Company’s stock;
a change in effective control, of the Company occurs on one of the following dates:
the date that a person acquires (or has acquired in a 12 month period) ownership of 30% or more of the Company’s total voting power; however, if a person already owns at least 30% of the Company’s total voting power, the acquisition of additional control does not constitute a change in control; or
the date during a 12 month period where a majority of the Company’s Board is replaced by directors whose appointment or election was not endorsed by a majority of the Board; or
a change in the ownership of a substantial portion of the Company’s assets occurs on the date a person acquires (or has acquired in a 12 month period) assets of the Company having a total gross market value of at least 40% of the total gross fair market value of all of the Company’s assets immediately before such acquisition.
For purposes of” “good reason” and “just cause,” please see the employment agreements, “good reason” means:
the assignmentagreement of duties inconsistent with the title of theeach Named Executive Officer, or his current office or a material diminutioneach of the Named Executive Officer’s current authority, duties or responsibilities;
a diminution of the Named Executive Officer’s base salary or a material breach of the employment agreement by the Company; or
the relocation ofwhich is included as an exhibit to the Company’s principal executive offices more than 30 miles from the Company’s present principal executive officesmost recent Annual Report on Form 10-K or the transfer of the Named Executive Officer to a place other than the Company’s principal executive offices; and
Quarterly Report on Form 10-Q.the action causing the “good reason” is not cured within the applicable cure period.
For purposes of the employment agreements, “just cause” means:
the Named Executive Officer’s continued and material failure to perform the duties of his employment consistent with his position other than due to disability;
the Named Executive Officer’s failure to perform his material obligations under the employment agreement other than due to disability;
the Named Executive Officer’s material breach of the Company’s written policies concerning discrimination, harassment or securities trading;
the Named Executive Officer’s refusal or failure to follow lawful directives of the Board and any supervisors other than due to disability;
the Named Executive Officer’s commission of fraud, theft or embezzlement;
the Named Executive Officer’s conviction or indictment of a felony or other crime involving moral turpitude; or
the Named Executive Officer’s intentional breach of fiduciary duty; and
the action causing the “just cause” is not cured within the applicable cure period, if any.
Equity Plans
For equity grants under the
2012Matador Resources Company 2019 Long-Term Incentive Plan
(as amended, the “2019 Plan”), other than the PSUs, vesting upon a “change in control” for the Named Executive Officers mirrors the terms of their employment agreements.
The PSUs vest upon a “change in control” based on performance achieved through the date of such change in control, as it is anticipated that a change in control would make achievement of relative total shareholder performance impractical to measure.
The “change in control” provisions in the employment agreements and the equity grants under the
20122019 Plan help prevent management from being distracted by rumored or actual changes in control. The “change in control” provisions provide:
•incentives for those Named Executive Officers to remain with us despite the uncertainties of a potential or actual change in control;
•assurance of severance payments for terminated Named Executive Officers; and
•access to equity compensation after a change in control.
Stock Ownership Guidelines
We have adopted stock ownership guidelines for the following officers
andin the following designated amounts:
•Chairman and Chief Executive Officer — Officer—shares equal to five times base salary;
•President—shares equal to five times base salary;
| • | | Executive Vice Presidents — shares equal to two and 1/2 times base salary;
|
•Executive Vice Presidents—shares equal to two and 1/2 times base salary;
•Senior Vice Presidents — Presidents—shares equal to two times base salary; and
| • | | Vice Presidents and Executive Directors — shares equal to one and 1/2 times base salary.
|
Each of the foregoing
•Vice Presidents and Executive Directors—shares equal to one and 1/2 times base salary.
Newly appointed officers has five years from the later of the date of the closing of our initial public offering andhave until the fifth anniversary of his or her appointment as an officer of the Company inwithin which to achieve the stock ownership position. Shares that will count toward the stock ownership guidelines include time-lapsetime-based restricted shares that are still restricted and any shares held in trust by the officer or his immediate family over which he has direct beneficial ownership interest.shares. Shares that will not count toward the stock ownership guidelines include shares underlying unexercised stock options, unexercised stock appreciation rights, phantom units and performance-based awards for which the performance requirements have not been satisfied.
Until each of the above officers reaches the stock ownership level required of his or her position, such officer must hold at least
fifty percent (50%)50% of all “net shares” received through restricted stock,
PSU or RSU vesting or realized through stock option exercises. For this purpose, “net shares” means all shares retained after applicable withholding of any shares for tax purposes.
Messrs. Foran, Hairford, Lancaster, Adams and SingletonAdditionally, upon the vesting of restricted stock, PSUs or RSUs or the exercise of stock options, each
ownofficer must hold the net shares for a minimum of 12 months following such vesting or exercise, or until his earlier retirement. As of December 29, 2023, each Named Executive Officer owned shares in excess of the
applicable minimum requirement set forth in the stock ownership
guidelines.guidelines, and Mr. Foran held shares with a value equal to approximately 225 times his base salary then in effect.
67Matador Resources Company | 2024 Proxy Statement
Anti-Hedging and Anti-Pledging Policies
Pursuant to the Company’s insider trading policy, the Company prohibits hedging of its securities by directors, officers or employees.
Specifically, no such person shall purchase or sell, or make any offer to purchase or offer to sell, derivative securities relating to the Company’s stock, whether or not issued by the Company, or financial instruments that are designed to hedge or offset any decrease in the market value of the Company’s stock (including but not limited to prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engage in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Company equity securities (a) granted to such person by the Company as part of the compensation of such person; or (b) held, directly or indirectly, by such person. The insider trading policy also restricts directors and executive officers from pledging more than 25% of his or her holdings of the Company’s stock without the prior written consent of the
Environmental, Social and Corporate Governance Committee.
Nominating,
Clawback Policy
In October 2023, the Company adopted a compensation clawback policy applicable to the Company’s executive officers in accordance with applicable NYSE listing rules, a copy of which is filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Company’s clawback policy requires recovery of incentive-based compensation received by executive officers during the three fiscal years preceding the date it is determined that the Company is required to prepare an accounting restatement of its financial statements (including any such correction recorded in the Company’s current period financial statements) due to material non-compliance with any financial reporting requirement under the federal securities laws. The amount required to be recovered is the excess of the amount of incentive-based compensation received over the amount that would have been received had it been determined or calculated based on the Company’s restated financial results.
Strategic Planning and Compensation
and Planning Committee Report
We have reviewed and discussed with management the Compensation Discussion and Analysis required by Item
402(b) of Regulation S-K and based on such review and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy
Statement.Nominating,Statement and incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Strategic Planning and Compensation
and Planning Committee,
David M. Laney,
Reynald A. Baribault
Margaret B. Shannon
Monika U. Ehrman
Timothy E. Parker
Kenneth L. Stewart
68Matador Resources Company | 2024 Proxy Statement
Summary Compensation Table
The following table summarizes the total compensation awarded to, earned by or paid to
the Named Executive Officers for 2023, 2022 and 2021. Messrs.
Foran, Hairford, Lancaster, AdamsSingleton and
Singleton for 2015, 2014Frenzel were not Named Executive Officers prior to 2022 and
2013.Mr. Willey was not a Named Executive Officer prior to 2023. This table and the accompanying narrative should be read in conjunction with the
Compensation Discussion and Analysis,CD&A, which sets forth the objectives and other information regarding our executive compensation
program. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary | | | Bonus | | | Stock
Awards (1) | | | Option
Awards (2) | | | Non-Equity
Incentive Plan
Compensation (3) | | | All Other
Compensation | | | Total | |
Joseph Wm. Foran | | | 2015 | | | $ | 800,000 | | | $ | 750,000 | (4) | | $ | — | | | $ | 3,586,811 | | | $ | 1,080,000 | | | $ | 21,795 | (5) | | $ | 6,238,606 | |
Chairman of the Board and Chief Executive Officer | | | 2014 | | | $ | 750,000 | | | $ | 125,000 | | | $ | 400,000 | | | $ | 822,159 | | | $ | 550,000 | | | $ | 21,710 | (6) | | $ | 2,668,869 | |
| | | 2013 | | | $ | 600,000 | | | $ | — | | | $ | 328,400 | | | $ | 652,750 | | | $ | 600,000 | | | $ | 19,818 | (7) | | $ | 2,200,968 | |
| | | | | | | | |
Matthew V. Hairford | | | 2015 | | | $ | 500,000 | | | $ | 125,000 | (4) | | $ | — | | | $ | 682,293 | | | $ | 563,000 | | | $ | 22,452 | (8) | | $ | 1,892,746 | |
President | | | 2014 | | | $ | 450,000 | | | $ | 50,000 | | | $ | 184,999 | | | $ | 485,101 | | | $ | 300,000 | | | $ | 22,102 | (9) | | $ | 1,492,202 | |
| | | 2013 | | | $ | 330,000 | | | $ | — | | | $ | 205,250 | | | $ | 438,275 | | | $ | 250,000 | | | $ | 18,826 | (10) | | $ | 1,242,351 | |
| | | | | | | | |
David E. Lancaster | | | 2015 | | | $ | 425,000 | | | $ | 175,000 | (4) | | $ | 146,301 | | | $ | 339,753 | | | $ | 470,000 | | | $ | 18,550 | (11) | | $ | 1,574,603 | |
Executive Vice President and Chief Financial Officer | | | 2014 | | | $ | 400,000 | | | $ | 50,000 | | | $ | 325,002 | | | $ | 267,201 | | | $ | 250,000 | | | $ | 18,200 | (11) | | $ | 1,310,403 | |
| | | 2013 | | | $ | 375,000 | | | $ | — | | | $ | 246,300 | | | $ | 466,250 | | | $ | 225,000 | | | $ | 17,850 | (11) | | $ | 1,330,400 | |
| | | | | | | | |
Craig N. Adams | | | 2015 | | | $ | 425,000 | | | $ | 200,000 | (4) | | $ | 146,301 | | | $ | 339,753 | | | $ | 385,000 | | | $ | 20,831 | (12) | | $ | 1,516,884 | |
Executive Vice President — | | | 2014 | (13) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Land, Legal & Administration | | | 2013 | (13) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | |
Van H. Singleton, II | | | 2015 | | | $ | 325,000 | | | $ | 100,000 | (4) | | $ | 91,033 | | | $ | 290,065 | | | $ | 295,000 | | | $ | 18,550 | (11) | | $ | 1,119,648 | |
Executive Vice President of | | | 2014 | (13) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Land | | | 2013 | (13) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
(1) | Reflects the grant date fair value of service-based restricted stock computed in accordance with FASB ASC Topic 718. This is the amount that will be expensed for these awards, regardless of the actual number of shares of Common Stock ultimately issued to the recipients of the awards, provided that the requisite service is furnished. |
(2) | Reflects the grant date fair value of option awards computed in accordance with FASB ASC Topic 718. Our policy and assumptions made in the valuation of the stock options are contained in Note 2 and Note 8 of the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015. |
(3) | Represents awards pursuant to the 2015, 2014 and 2013 Incentive Programs, respectively. |
(4) | Reflects ad hoc discretionary bonuses awarded following the HEYCO Merger in February 2015 and the Company’s senior notes offering and public equity offering in April 2015. |
(5) | Consists of $18,550 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits,” $646 in premiums reimbursed to Mr. Foran for a life insurance policy covering Mr. Foran and $2,599 in long-term care insurance premiums. |
(6) | Consists of $18,200 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits,” $911 in premiums reimbursed to Mr. Foran for a life insurance policy covering Mr. Foran and $2,599 in long-term care insurance premiums. |
(7) | Consists of $17,850 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits,” $1,318 in premiums reimbursed to Mr. Foran for a life insurance policy covering Mr. Foran and $650 in long-term care insurance premiums. |
(8) | Consists of $18,550 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits” and $3,902 in long-term care insurance premiums. |
(9) | Consists of $18,200 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits” and $3,902 in long-term care insurance premiums. |
(10) | Consists of $17,850 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits” and $976 in long-term care insurance premiums. |
(11) | Reflects 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits.” |
(12) | Consists of $18,550 in 401(k) matching contributions as described in “— Compensation Discussion and Analysis — Benefits” and $2,281 in long-term care insurance premiums. |
(13) | Messrs. Adams and Singleton were not Named Executive Officers in 2014 and 2013. |
program:
| | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation | Total |
| Joseph Wm. Foran | 2023 | $1,350,000 | $3,575,900 | $3,105,000 | $25,699(3) | $8,056,599 |
| Chairman of the Board and | 2022 | $1,350,000 | $4,472,369 | $3,105,000 | $23,949 | $8,951,318 |
| Chief Executive Officer | 2021 | $1,231,250 | $5,203,040 | $2,600,000 | $22,899 | $9,057,189 |
| Van H. Singleton, II | 2023 | $800,000 | $1,787,950 | $1,610,000 | $23,100(4) | $4,221,050 |
| President-Land, Acquisitions | 2022 | $750,000 | $2,140,604 | $1,509,375 | $21,350 | $4,421,329 |
| and Divestitures and Planning | | | | | | |
| Brian J. Willey | 2023 | $600,000 | $1,008,980 | $1,365,000 | $23,100(4) | $2,997,080 |
| Executive Vice President | | | | | | |
| and Chief Financial Officer | | | | | | |
| Billy E. Goodwin | 2023 | $800,000 | $1,787,950 | $1,610,000 | $23,100(4) | $4,221,050 |
| Former President-Operations | 2022 | $750,000 | $2,140,604 | $1,509,375 | $21,350 | $4,421,329 |
| 2021 | $693,333 | $2,349,760 | $1,160,000 | $20,300 | $4,223,393 |
| Craig N. Adams | 2023 | $800,000 | $1,787,950 | $1,610,000 | $25,381(5) | $4,223,331 |
| Former Executive Vice President, | 2022 | $750,000 | $2,140,604 | $1,509,375 | $23,631 | $4,423,610 |
| Co-Chief Operating Officer, Chief of Staff and Corporate Secretary | 2021 | $693,333 | $2,349,760 | $1,160,000 | $22,581 | $4,225,674 |
| Michael D. Frenzel | 2023 | $450,000 | $801,205 | $776,250 | $23,100(4) | $2,050,555 |
| Executive Vice President, | 2022 | $463,540 | $1,032,063 | $450,000 | $21,350 | $1,966,953 |
| Treasurer and Former Principal Financial Officer | | | | | | |
(1)Reflects the grant date fair value of phantom units, PSUs or restricted stock awards, as applicable, computed in accordance with FASB ASC Topic 718. The Company uses the Monte Carlo simulation method to measure the fair value of PSUs and the closing price of the Company's Common Stock on the trading day prior to the grant date to measure the fair value of restricted stock and phantom unit awards. For 2023, the portion of the amount reflected in this column relating to the PSUs is calculated based on probable outcome as of the grant date and assumes achievement between target and maximum. The grant date value of PSUs granted in 2023 assuming achievement of maximum performance is $3,324,400 for Mr. Foran, $1,662,200 for Messrs. Singleton, Goodwin and Adams, $997,320 for Mr. Willey and $581,770 for Mr. Frenzel.
(2)Represents awards pursuant to the Cash Incentive Plan. See “—Compensation Discussion and Analysis—2023 Annual Cash Incentive Compensation” above.
(3)Consists of $23,100 in 401(k) Company and matching contributions as described in “—Compensation Discussion and Analysis—Benefits” and $2,599 in long-term care insurance premiums.
(4)Reflects 401(k) Company and matching contributions as described in “—Compensation Discussion and Analysis—Benefits.”
(5)Consists of $23,100 in 401(k) Company and matching contributions as described in “—Compensation Discussion and Analysis—Benefits” and $2,281 in long-term care insurance premiums.
EXECUTIVE COMPENSATION
69Matador Resources Company | 2024 Proxy Statement
Grants of Plan-Based Awards Table
The following table sets forth certain information regarding non-equity incentive awards granted by the CompanyIndependent Board pursuant to the 2015Cash Incentive ProgramPlan and stockawards of share-settled PSUs, cash-settled phantom units and option awardsrestricted stock granted by the CompanyIndependent Board to the Named Executive Officers pursuant to the 20122019 Plan during the year ended December 31, 20152023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units(3) | Grant Date Fair Value Stock Awards |
| | Threshold | Target | Maximum | Threshold | Target | Maximum |
| Name | Grant Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | ($) |
| Joseph Wm. Foran | - | — | | 1,350,000 | | 3,510,000 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 20,000 | | 40,000 | | — | | 1,662,200 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 30,000 | | 1,913,700 | |
| Van H. Singleton, II | - | — | | 800,000 | | 1,820,000 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 10,000 | | 20,000 | | — | | 831,100 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 15,000 | | 956,850 | |
| Brian J. Willey | - | — | | 600,000 | | 1,365,000 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 6,000 | | 12,000 | | — | | 498,660 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 8,000 | | 510,320 | |
Billy E. Goodwin(4) | - | — | | 800,000 | | 1,820,000 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 10,000 | | 20,000 | | — | | 831,100 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 15,000 | | 956,850 | |
Craig N. Adams(5) | - | — | | 800,000 | | 1,820,000 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 10,000 | | 20,000 | | — | | 831,100 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 15,000 | | 956,850 | |
| Michael D. Frenzel | - | — | | 450,000 | | 843,750 | | — | | — | | — | | — | | — | |
| 2/16/23 | — | | — | | — | | — | | 3,500 | | 7,000 | | — | | 290,885 | |
| 2/16/23 | — | | — | | — | | — | | — | | — | | 8,000 | | 510,320 | |
(1) See “—Compensation Discussion and Analysis—2023 Annual Cash Incentive Compensation” and “—Summary Compensation Table— Non-Equity Incentive Plan Compensation” regarding the actual payments made to the Named Executive Officers
below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) | | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units | | | All Other
Option
Awards:
Number of
Securities
Underlying
Options(2) | | | Exercise
or Base
Price of
Option
Awards | | | Grant
Date
Fair
Value of
Stock
and
Option
Awards | |
| | | | | | Threshold | | | Target | | | Maximum | | | | | |
Name | | Grant Date | | | ($) | | | ($) | | | ($) | | | (# shares) | | | (# shares) | | | ($/share) | | | ($) | |
Joseph Wm. Foran | | | 1/21/2015 | | | | — | | | | — | | | | — | | | | — | | | | 228,571 | | | | 22.01 | | | | 2,210,282 | |
| | | 2/27/2015 | | | | — | | | | — | | | | — | | | | — | | | | 105,000 | | | | 21.66 | | | | 1,029,000 | |
| | | 4/30/2015 | | | | 320,000 | | | | 600,000 | | | | 1,200,000 | | | | — | | | | 27,451 | | | | 27.72 | | | | 347,530 | |
Matthew V. Hairford | | | 1/21/2015 | | | | — | | | | — | | | | — | | | | — | | | | 62,857 | | | | 22.01 | | | | 607,827 | |
| | | 4/30/2015 | | | | 175,000 | | | | 350,000 | | | | 625,000 | | | | — | | | | 5,882 | | | | 27.72 | | | | 74,466 | |
David E. Lancaster | | | 1/21/2015 | | | | — | | | | — | | | | — | | | | 4,375 | | | | — | | | | — | | | | 96,294 | |
| | | 1/21/2015 | | | | — | | | | — | | | | — | | | | — | | | | 30,000 | | | | 22.01 | | | | 290,100 | |
| | | 4/30/2015 | | | | 148,750 | | | | 276,250 | | | | 510,000 | | | | 1,804 | | | | — | | | | — | | | | 50,007 | |
| | | 4/30/2015 | | | | — | | | | — | | | | — | | | | — | | | | 3,922 | | | | 27.72 | | | | 49,653 | |
Craig N. Adams | | | 1/21/2015 | | | | — | | | | — | | | | — | | | | 4,375 | | | | — | | | | — | | | | 96,294 | |
| | | 1/21/2015 | | | | — | | | | — | | | | — | | | | — | | | | 30,000 | | | | 22.01 | | | | 290,100 | |
| | | 4/30/2015 | | | | 106,250 | | | | 212,500 | | | | 425,000 | | | | 1,804 | | | | — | | | | — | | | | 50,007 | |
| | | 4/30/2015 | | | | — | | | | — | | | | — | | | | — | | | | 3,922 | | | | 27.72 | | | | 49,653 | |
Van H. Singleton, II | | | 1/21/2015 | | | | — | | | | — | | | | — | | | | 3,000 | | | | — | | | | — | | | | 66,030 | |
| | | 1/21/2015 | | | | — | | | | — | | | | — | | | | — | | | | 27,429 | | | | 22.01 | | | | 265,238 | |
| | | 4/30/2015 | | | | 81,250 | | | | 162,500 | | | | 325,000 | | | | 902 | | | | — | | | | — | | | | 25,003 | |
| | | 4/30/2015 | | | | — | | | | — | | | | — | | | | — | | | | 1,961 | | | | 27.72 | | | | 24,826 | |
(1) | See “— Compensation Discussion and Analysis — 2015 Annual Incentive Compensation” and “— Summary Compensation Table — Non-Equity Incentive Plan Compensation” regarding the actual payments made to the Named Executive Officers pursuant to the 2015 Incentive Program. |
(2) | The term of such option awards is five years. |
Discussion Regarding Summary Compensation Table and Grants of Plan-Based Awards Table
On August 9, 2011, we entered into employment agreements with Messrs. Foran, Lancaster and Hairford. On March 13, 2014, we entered into an employment agreement with Mr. Adams, and on February 27, 2015 we entered into an employment agreement with Mr. Singleton.
Mr. Foran. His employment agreement extends for a twenty-four month term that automatically renews each month for an additional month unless either the Company or Mr. Foran gives written notice that the term will no longer be extended. For 2015, his base salary was $800,000. Effective January 1, 2016, his base salary is $900,000, and he is eligible to participate in the Incentive Plan and receive awards pursuant to the 2012Cash Incentive Plan.
(2) Represents PSUs that provide for settlement of between 0% and 200% of the total target shares subject to the award based on achievement of the relative total shareholder return performance metric over a three-year performance period from January 1, 2023 through December 31, 2025. If our absolute total shareholder return over such performance period is negative, no more than 100%, the target level, of the PSUs may vest. See “—Compensation Discussion and Analysis — TerminationAnalysis—2023 Long-Term Incentive Compensation.” The PSUs do not provide for a threshold number of Employment Arrangements — Employment Agreements” regarding the payments toshares that may be made to Mr.earned.
(3) For Messrs. Foran,
upon termination of his employment and/or a “changeSingleton, Goodwin and Adams, represents phantom units that provide for settlement in
control.”Mr. Hairford. His employment agreement extends for an eighteen month term that automatically renews each month for an additional month unless either the Company or Mr. Hairford gives written notice that the term will no longer be extended.cash. For 2015, his base salary was $500,000. Effective January 1, 2016, his base salary is $550,000,Messrs. Willey and he is eligible to participate in the Incentive Plan and receive awards pursuant to the 2012 Plan.Frenzel, represents restricted stock. See “—Compensation Discussion and Analysis — Termination of Employment Arrangements — Employment
Agreements” regarding the paymentsAnalysis—2023 Long-Term Incentive Compensation.”
(4) Mr. Goodwin's outstanding equity incentive plan awards are expected to be
made to Mr. Hairfordforfeited upon
terminationthe end of his
employment and/or a “change in control.”employment.
(5) Mr.
Lancaster. His employment agreement extends for an eighteen month term that automatically renews each month for an additional month unless eitherAdams' outstanding equity incentive plan awards were forfeited upon the
Company or Mr. Lancaster gives written notice that the term will no longer be extended. For 2015, his base salary was $425,000. Effective January 1, 2016, his base salary is $475,000, and he is eligible to participate in the Incentive Plan and receive awards pursuant to the 2012 Plan. See “— Compensation Discussion and Analysis — Termination of Employment Arrangements — Employment Agreements” regarding the payments to be made to Mr. Lancaster upon terminationend of his
employment and/or a “change in control.”Mr. Adams. His employment agreement extends for an eighteen month term that automatically renews each month for an additional month unless either theemployment.
70Matador Resources Company or Mr. Adams gives written notice that the term will no longer be extended. For 2015, his base salary was $425,000. Effective January 1, 2016, his base salary is $475,000, and he is eligible to participate in the Incentive Plan and receive awards pursuant to the 2012 Plan. See “— Compensation Discussion and Analysis — Termination of Employment Arrangements — Employment Agreements” regarding the payments to be made to Mr. Adams upon termination of his employment and/or a “change in control.”Mr. Singleton. His employment agreement extends for an eighteen month term that automatically renews each month for an additional month unless either the Company or Mr. Singleton gives written notice that the term will no longer be extended. For 2015, his base salary was $325,000. Effective January 1, 2016, his base salary is $375,000, and he is eligible to participate in the Incentive Plan and receive awards pursuant to the 2012 Plan. See “— Compensation Discussion and Analysis — Termination of Employment Arrangements — Employment Agreements” regarding the payments to be made to Mr. Singleton upon termination of his employment and/or a “change in control.”
Non-Equity Incentive Plan Compensation. See “— Compensation Discussion and Analysis — 2015 Annual Incentive Compensation” regarding the 2015 Incentive Program compensation goals, threshold, target and maximum potential payments and actual payments.
Long-Term Incentive Compensation. See “— Compensation Discussion and Analysis — 2015 Long-Term Incentive Compensation” regarding 2015 long-term incentive compensation.
General. Base salary and the amount of cash bonuses, including non-equity awards granted by the Company pursuant to the 2015 Incentive Program, paid for 2015 represented from approximately 42% to approximately 68% of the Named Executive Officers’ total compensation as represented in the Summary Compensation Table with the percentages being as follows: Mr. Foran — 42.4%; Mr. Hairford — 62.8%; Mr. Lancaster — 68.0%; Mr. Adams — 66.6%; and Mr. Singleton — 64.3%.
|
2024 Proxy Statement
Outstanding Equity Awards at December 31,
20152023
The following table summarizes the total outstanding option awards at December 31, 2015 for2023 held by Mr. Frenzel. None of the other Named Executive Officers held any stock options as of such date.
| | | | | | | | | | | | | | |
| Option Awards |
| Name | Number of Securities Underlying Unexercised Stock Options (#) Exercisable | Number of Securities Underlying Unexercised Stock Options (#) Unexercisable | Option Exercise Price | Option Expiration Date |
| Michael D. Frenzel | 20,000 | | — | | $ | 14.80 | | 8/27/25 |
| 5,439 | | — | | $ | 29.68 | | 2/15/24 |
Option Awards
The following table summarizes the total outstanding cash-settled phantom units, restricted shares and share-settled PSUs held as of December 31, 2023 by each Named Executive Officer:
| | | | | | | | | | | | | | | | |
| | | Option Awards | |
Name | | Number of
Securities
Underlying
Unexercised
Stock
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Stock
Options (#)
Unexercisable | | | Option
Exercise
Price | | | Option
Expiration
Date | |
Joseph Wm. Foran | | | 40,104 | | | | 40,104 | | | $ | 10.49 | | | | 4/15/17 | |
| | | 87,500 | | | | 87,500 | | | $ | 8.21 | | | | 3/7/18 | |
| | | — | | | | 20,294 | | | $ | 19.71 | | | | 2/10/19 | |
| | | — | | | | 68,376 | | | $ | 23.40 | | | | 3/6/19 | |
| | | — | | | | 228,571 | | | $ | 22.01 | | | | 1/20/20 | |
| | | — | | | | 105,000 | | | $ | 21.66 | | | | 2/26/20 | |
| | | — | | | | 27,451 | | | $ | 27.72 | | | | 4/29/20 | |
| | | | |
Matthew V. Hairford | | | 10,000 | | | | — | | | $ | 9.00 | | | | 2/21/20 | |
| | | 16,250 | | | | 16,250 | | | $ | 10.49 | | | | 4/15/17 | |
| | | 58,750 | | | | 58,750 | | | $ | 8.21 | | | | 3/7/18 | |
| | | — | | | | 5,074 | | | $ | 19.71 | | | | 2/10/19 | |
| | | — | | | | 46,154 | | | $ | 23.40 | | | | 3/6/19 | |
| | | — | | | | 62,857 | | | $ | 22.01 | | | | 1/20/20 | |
| | | — | | | | 5,882 | | | $ | 27.72 | | | | 4/29/20 | |
| | | | |
David E. Lancaster | | | 15,000 | | | | — | | | $ | 9.00 | | | | 2/21/20 | |
| | | 21,250 | | | | 21,250 | | | $ | 10.49 | | | | 4/15/17 | |
| | | 62,500 | | | | 62,500 | | | $ | 8.21 | | | | 3/7/18 | |
| | | — | | | | 7,610 | | | $ | 19.71 | | | | 2/10/19 | |
| | | — | | | | 21,368 | | | $ | 23.40 | | | | 3/6/19 | |
| | | — | | | | 30,000 | | | $ | 22.01 | | | | 1/20/20 | |
| | | — | | | | 3,922 | | | $ | 27.72 | | | | 4/29/20 | |
| | | | |
Craig N. Adams | | | 10,000 | | | | 10,000 | | | $ | 10.39 | | | | 9/27/17 | |
| | | 20,000 | | | | 20,000 | | | $ | 8.21 | | | | 3/7/18 | |
| | | — | | | | 6,342 | | | $ | 19.71 | | | | 2/10/19 | |
| | | — | | | | 25,801 | | | $ | 23.40 | | | | 3/6/19 | |
| | | — | | | | 30,000 | | | $ | 22.01 | | | | 1/20/20 | |
| | | — | | | | 3,922 | | | $ | 27.72 | | | | 4/29/20 | |
| | | | |
Van H. Singleton, II | | | 10,000 | | | | — | | | $ | 9.00 | | | | 2/21/20 | |
| | | 7,291 | | | | 7,292 | | | $ | 10.49 | | | | 4/15/17 | |
| | | 16,875 | | | | 16,875 | | | $ | 8.18 | | | | 3/11/18 | |
| | | — | | | | 8,274 | | | $ | 22.66 | | | | 3/16/19 | |
| | | — | | | | 27,429 | | | $ | 22.01 | | | | 1/20/20 | |
| | | — | | | | 1,961 | | | $ | 27.72 | | | | 4/29/20 | |
| | | | | | | | | | | | | | | | | |
| Stock Awards |
| Name | Award Type | Number of Shares or Units of Stock That Have Not Vested
(#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) ($) |
| Joseph Wm. Foran | Phantom units | 84,288 | | 4,792,616 | | — | | — | |
| PSUs | — | | — | | 109,094 | | 6,203,085 | |
| Van H. Singleton, II | Phantom units | 39,426 | | 2,241,762 | | — | | — | |
| PSUs | — | | — | | 53,070 | | 3,017,560 | |
| Brian J. Willey | Phantom units | — | | — | | — | | — | |
| PSUs | — | | — | | 27,944 | | 1,588,896 | |
| Restricted stock | — | | — | | 19,926 | | 1,132,992 | |
Billy E. Goodwin(3) | Phantom units | 40,426 | | 2,298,622 | | — | | — | |
| PSUs | — | | — | | 53,070 | | 3,017,560 | |
Craig N. Adams(4) | Phantom units | 40,426 | | 2,298,622 | | — | | — | |
| PSUs | — | | — | | 53,070 | | 3,017,560 | |
| Michael D. Frenzel | Phantom units | — | | — | | — | | — | |
| PSUs | — | | — | | 22,944 | | 1,304,596 | |
| Restricted stock | — | | — | | 19,926 | | 1,132,992 | |
(1)The market value is calculated based upon the closing price of our Common Stock on December 29, 2023 of $56.86 per share.
(2)The number of unearned PSUs and market value presented are based upon achievement of the 100th percentile under the PSU award agreements with 200% of target units vesting, calculated based upon the closing price of our Common Stock on December 29, 2023 of $56.86 per share.
(3)Mr. Goodwin's outstanding cash-settled phantom units and share-settled PSUs are expected to be forfeited upon the end of his employment.
(4)Mr. Adams' outstanding cash-settled phantom units and share-settled PSUs were forfeited upon the end of his employment.
71Matador Resources Company | 2024 Proxy Statement
The following table provides the vesting dates
atfor restricted stock, cash-settled phantom units and PSUs outstanding as of December 31,
2015 for unvested stock options: | | | | | | | | | | | | | | | | | | | | |
Vesting Date | | Joseph Wm.
Foran | | | Matthew V.
Hairford | | | David E.
Lancaster | | | Craig N.
Adams | | | Van H.
Singleton, II | |
2/11/16 | | | 10,147 | | | | 2,537 | | | | 3,805 | | | | 3,171 | | | | — | |
3/7/16 | | | 34,188 | | | | 23,077 | | | | 10,684 | | | | 12,900 | | | | — | |
3/17/16 | | | — | | | | — | | | | — | | | | — | | | | 4,137 | |
4/16/16 | | | 40,104 | | | | 16,250 | | | | 21,250 | | | | — | | | | 7,292 | |
9/28/16 | | | — | | | | — | | | | — | | | | 10,000 | | | | — | |
3/8/17 | | | 87,500 | | | | 58,750 | | | | 62,500 | | | | 20,000 | | | | — | |
3/12/17 | | | — | | | | — | | | | — | | | | — | | | | 16,875 | |
4/30/17 | | | 13,725 | | | | 2,941 | | | | 1,961 | | | | 1,961 | | | | 980 | |
1/21/18 | | | 228,571 | | | | 62,857 | | | | 30,000 | | | | 30,000 | | | | 27,429 | |
2/11/18 | | | 10,147 | | | | 2,537 | | | | 3,805 | | | | 3,171 | | | | — | |
2/27/18 | | | 105,000 | | | | — | | | | — | | | | — | | | | — | |
3/7/18 | | | 34,188 | | | | 23,077 | | | | 10,684 | | | | 12,901 | | | | — | |
3/17/18 | | | — | | | | — | | | | — | | | | — | | | | 4,137 | |
4/30/19 | | | 13,726 | | | | 2,941 | | | | 1,961 | | | | 1,961 | | | | 981 | |
| | | | | | | | | | | | | | | | | | | | |
Total Unvested Stock Options | | | 577,296 | | | | 194,967 | | | | 146,650 | | | | 96,065 | | | | 61,830 | |
| | | | | | | | | | | | | | | | | | | | |
2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| Vesting Date | Award Type | Joseph Wm. Foran | Van H. Singleton | Brian J. Willey | Billy E. Goodwin | Craig N. Adams | Michael D. Frenzel |
| 2/16/24 | Restricted stock | — | — | 2,666 | — | — | 2,666 |
| 2/16/24 | Phantom units | 10,000 | 5,000 | — | 5,000 | 5,000 | — |
| 2/17/24 | Restricted stock | — | — | 3,879 | — | — | 3,879 |
| 2/17/24 | Phantom units | 16,810 | 8,046 | — | 8,046 | 8,046 | — |
| 6/4/24 | Restricted stock | — | — | 4,167 | — | — | 4,167 |
| 6/4/24 | Phantom units | 20,667 | 8,334 | — | 9,334 | 9,334 | — |
| 12/31/24 | PSUs(1) | 69,094 | 33,070 | 15,944 | 33,070 | 33,070 | 15,944 |
| 2/16/25 | Restricted stock | — | — | 2,667 | — | — | 2,667 |
| 2/16/25 | Phantom units | 10,000 | 5,000 | — | 5,000 | 5,000 | — |
| 2/17/25 | Restricted stock | — | — | 3,880 | — | — | 3,880 |
| 2/17/25 | Phantom units | 16,811 | 8,046 | — | 8,046 | 8,046 | — |
| 12/31/25 | PSUs(1) | 40,000 | 20,000 | 12,000 | 20,000 | 20,000 | 7,000 |
| 2/16/26 | Restricted stock | — | — | 2,667 | — | — | 2,667 |
| 2/16/26 | Phantom units | 10,000 | 5,000 | — | 5,000 | 5,000 | — |
| Total Unvested Shares and Units | 193,382 | 92,496 | 47,870 | 93,496 | 93,496 | 42,870 |
(1)The vesting date shown reflects the end of the performance period established by the PSU award agreements. The PSUs vest upon the Compensation Committee’s certification of the achievement of the performance goal, which must occur within 60 days of completion of the performance period. The number of units shown assumes achievement of the 100thpercentile under the PSU award agreements with 200% of target units vesting.
Option Exercises and Stock Vested
The following table
summarizesprovides information on the
total outstanding stock awards
at December 31, 2015(consisting of restricted stock, cash-settled phantom units and PSUs) that vested for each Named Executive
Officer: | | | | | | | | | | | | | | | | |
| | | Stock Awards | |
Name | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | | Market Value of
Shares or Units of
Stock That Have
Not Vested | | | Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested (#) | | | Market or
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have
Not Vested | |
Joseph Wm. Foran | | | 67,120 | | | $ | 1,326,962 | | | | — | | | | — | |
Matthew V. Hairford | | | 37,369 | | | $ | 738,785 | | | | — | | | | — | |
David E. Lancaster | | | 55,981 | | | $ | 1,106,744 | | | | — | | | | — | |
Craig N. Adams | | | 31,150 | | | $ | 615,836 | | | | — | | | | — | |
Van H. Singleton, II | | | 23,979 | | | $ | 474,065 | | | | — | | | | — | |
The following table providesOfficer during 2023. None of the vesting dates at December 31, 2015 forNamed Executive Officers exercised any stock options during 2023.
| | | | | | | | | | | | | | |
| Option Awards | Stock Awards |
| Name | Number of Shares Acquired on Exercise
(#) | Value Realized on Exercise | Number of Shares Acquired on Vesting(1) (#) | Value Realized on Vesting |
| Joseph Wm. Foran | — | $— | 200,924 | $11,094,710 |
| Van H. Singleton, II | — | $— | 79,460 | $4,403,355 |
| Brian J. Willey | — | $— | 31,963 | $1,786,607 |
| Billy E. Goodwin | — | $— | 89,781 | $4,964,195 |
| Craig N. Adams | — | $— | 89,781 | $4,964,195 |
| Michael D. Frenzel | — | $— | 35,296 | $1,953,823 |
(1)Reflects the aggregate number of restricted stock: | | | | | | | | | | | | | | | | | | | | |
Vesting Date | | Joseph Wm.
Foran | | | Matthew V.
Hairford | | | David E.
Lancaster | | | Craig N.
Adams | | | Van H.
Singleton, II | |
2/11/16 | | | — | | | | 1,268 | | | | 1,902 | | | | 1,585 | | | | — | |
3/7/16 | | | 8,547 | | | | 2,884 | | | | 5,342 | | | | 2,150 | | | | — | |
3/17/16 | | | — | | | | — | | | | — | | | | — | | | | 689 | |
4/16/16 | | | 10,026 | | | | 4,063 | | | | 5,313 | | | | — | | | | 1,823 | |
9/28/16 | | | — | | | | — | | | | — | | | | 2,500 | | | | — | |
3/8/17 | | | 40,000 | | | | 25,000 | | | | 30,000 | | | | 15,000 | | | | — | |
3/12/17 | | | — | | | | — | | | | — | | | | — | | | | 16,875 | |
1/21/18 | | | — | | | | — | | | | 4,375 | | | | 4,375 | | | | 3,000 | |
2/11/18 | | | — | | | | 1,269 | | | | 1,903 | | | | 1,586 | | | | — | |
3/7/18 | | | 8,547 | | | | 2,885 | | | | 5,342 | | | | 2,150 | | | | — | |
3/17/18 | | | — | | | | — | | | | — | | | | — | | | | 690 | |
4/30/18 | | | — | | | | — | | | | 1,804 | | | | 1,804 | | | | 902 | |
| | | | | | | | | | | | | | | | | | | | |
Total Unvested Shares | | | 67,120 | | | | 37,369 | | | | 55,981 | | | | 31,150 | | | | 23,979 | |
| | | | | | | | | | | | | | | | | | | | |
shares, cash-settled phantom units and PSUs that vested. Pursuant to the terms thereof, the phantom units were settled in cash, and the grantee did not acquire any shares upon vesting.
72Matador Resources Company | 2024 Proxy Statement
EXECUTIVE COMPENSATION
Potential Payments
Uponupon Termination or Change in Control
2012 Plan
Long-Term Incentive Plans
Equity awards under the
20122019 Plan,
other than the PSUs, vest upon a “change in control” for the Named Executive Officers according to the terms of their employment agreements described below.
Pursuant to the terms of the PSU award agreements, upon a “change in control,” the Named Executive Officer would vest in the number of PSUs that would have otherwise vested based on the Company’s performance through an abbreviated performance period that ends immediately prior to the effective date of such change in control. For definition of “change in control,” please see the 2019 Plan, which is included as an exhibit to the Company’s most recent Annual Report on Form 10-K.
As described under
“Discussion Regarding Summary “—Compensation
TableDiscussion and
Grants of Plan-Based Awards Table,Analysis—Severance and Separation Arrangements—Employment Agreements,” in contemplation of our initial public offering, on August 9, 2011, we entered into
an employment
agreementsagreement with
Messrs. Foran, HairfordMr. Foran. Effective February 2016, we entered into an employment agreement with Mr. Goodwin and,
Lancaster.in August 2018, amended Mr. Goodwin’s employment agreement. In addition,
onin February 2015, we entered into an employment agreement with Mr. Singleton and, in March
13, 2014, we entered into an employment agreement with Mr.
Adams, and on February 27, 2015Adams. In October 2022, we entered into an employment agreement with Mr.
Singleton.Frenzel. In April 2024, we entered into an employment agreement with Mr. Willey. The principal difference in
Mr. Adams’Messrs. Goodwin, Singleton, Adams, Frenzel and
Mr. Singleton’sWilley’s employment agreements as compared to the employment agreement of
Messrs.Mr. Foran
Hairford and Lancaster is that
Mr. Adams’ and Mr. Singleton’stheir agreements do not include a “modified single trigger” that would have allowed them to receive
a “change in control”
paymentseverance if they terminated their agreements without “good reason” within 30 days prior to or 12 months after a change in control.
In addition to not including a “modified single trigger,” Messrs. Frenzel and Willey’s employment agreements do not include termination for good reason except following a change in control and include a longer non-compete, as discussed below. Pursuant to the terms of the employment agreements, we may be required to make certain payments to one or more of our Named Executive Officers upon the occurrence of certain events resulting in such Named Executive Officer’s termination.
The employment agreements do not provide for gross-ups for excise taxes on severance or other payments in connection with a change in control. For a detailed description of the events that may trigger such payments, see “—Compensation Discussion and
Analysis — Termination of Employment Arrangements — Analysis—Severance and Separation Arrangements—Employment Agreements.”
The employment agreements each contain a non-disclosure of confidential information provision that requires each Named Executive Officer to maintain, both during and after employment, the confidentiality of information used by such Named Executive Officer in the performance of his job duties.
Additionally, each of the employment agreements contains a non-competition provision, pursuant to which
Messrs. Foran, Hairford, Lancaster, Adams and Singleton haveeach Named Executive Officer has agreed that: (i) for six months following termination by us for total disability, or by such Named Executive Officer for good reason, or (ii) for 12 months,
with respect to Messrs. Foran, Singleton, Goodwin and Adams and 18 months with respect to Messrs. Willey and Frenzel, following termination (a) by us for just cause, (b) by such Named Executive Officer other than for good reason
(excluding Messrs. Willey and Frenzel) or (c) in connection with a change in control
(24 months with respect to Messrs. Willey and Frenzel), such Named Executive Officer shall not, without our prior written consent (not to be unreasonably withheld if the Named Executive Officer’s employment is terminated by the Named Executive Officer other than for good
reason)reason (excluding Messrs. Willey and Frenzel)), directly or indirectly: (x) invest in (other than investments in publicly-owned companies which constitute not more than 1% of the voting securities of any such company) a competing business with significant assets in the restricted area (each as defined below), or (y) participate in a competing business as a manager, employee, director, officer, consultant, independent contractor or other capacity or otherwise provide, directly or indirectly, services or assistance to a competing business in a position that involves input into or direction of such competing business’s decisions within the restricted area.
73Matador Resources Company | 2024 Proxy Statement
For purposes of the employment agreements:
•“competing business” means any person or entity engaged in oil and natural gas exploration, development, production and acquisition activities;
•“significant assets” means oil and natural gas reserves with an aggregate fair market value of $25 million or more;more (for Messrs. Willey and Frenzel, oil and natural gas reserves in excess of 10 million barrels of oil equivalent or midstream assets with an aggregate fair market value of $25 million or more); and
•“restricted area” means a one-mile radius of any oil and natural gas reserves held by us as of the end of the Named Executive Officer’s employment, plus any county or parish where we have significant assets as of the end of the Named Executive Officer’s employment. Seeemployment (for Messrs. Willey and Frenzel, Eddy and Lea Counties, New Mexico and Loving County, Texas, plus any county or parish where we have significant assets as of the end of his employment).
For definitions of “change in control,” “good reason” and “just
cause” set forth in “— Compensation Discussion and Analysis — Terminationcause,” please see the employment agreement of
Employment Arrangements — Employment Agreements.”each Named Executive Officer, each of which is included as an exhibit to the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q.
Furthermore, other than Mr. Foran’s employment agreement, each employment agreement contains
an anti-solicitationa non-solicitation provision, pursuant to which, during the restricted periods described above
(except Messrs. Willey and Frenzel’s restricted period is six months for disability termination and 24 months for the other terminations specified above), subject to certain exceptions, Messrs.
Hairford, Lancaster,Singleton, Willey, Goodwin, Adams and
SingletonFrenzel shall not, without our prior written consent, solicit for employment or a contracting relationship, or employ or retain any person who is or has been, within six months prior to such time, employed by or engaged as an individual independent contractor by us or our affiliates or induce or attempt to induce any such person to leave his or her employment or independent contractor relationship with us or our affiliates.
For the Named Executive Officer to receive any severance payments described below for termination by us without just cause, by the Named Executive Officer for good reason or, following a change in control, by us without cause or by the Named Executive Officer with good reason, with respect to
Mr.Messrs. Singleton, Willey, Goodwin, Adams and
Mr. Singleton,Frenzel, or with or without good reason, with respect to
Messrs.Mr. Foran,
Hairford and Lancaster, the Named Executive Officer must comply with the
applicable non-disclosure, non-competition and non-solicitation provisions described above.
Finally, as a condition to receiving any severance payments and other payments under their respective employment agreements, each Named Executive Officer is required to execute a separation agreement and release in favor of us.
To describe the payments and benefits that are triggered for each event of termination, we have created the following table estimating the payments and benefits that would be paid to each Named Executive Officer under each element of our compensation program assuming that such Named Executive Officer’s employment agreement terminated on December 31,
2015,2023, the last day of our
20152023 fiscal year. In all cases, the
amountsaccelerated equity awards were valued as of December
31, 2015,29, 2023, based upon, where applicable,
the$56.86 per share (the closing price of our Common Stock
of $19.77 per share.on such date). The amounts in the table below are calculated as of December 31,
20152023 pursuant to SEC rules and are not intended to reflect actual payments that may be made. Actual payments that may be made
willwould be based on the dates and circumstances of the applicable event.
| | | | | | | | | | | | | | | | | | |
| | | Payment Upon Termination | |
Named Executive Officer | | Category of
Payment | | Upon Death or
Total
Disability (1) | | | Upon Mutual
Agreement or
Dissolution/
Liquidation (1) | | | Termination by
Us Without Just
Cause or by
Named Executive
Officer for Good
Reason (1) | | | Termination
Following a Change
in Control Without
Cause or by Named
Executive Officer
With or Without
Good Reason (2) | |
Joseph Wm. Foran | | Salary | | $ | — | | | $ | — | | | $ | 1,600,000 | (3) | | $ | 2,400,000 | (4) |
| | Bonus | | | 1,252,500 | (5) | | | 1,252,500 | (5) | | | 2,505,000 | (6) | | | 3,757,500 | (7) |
| | Vesting equity | | | — | | | | — | | | | — | | | | 2,711,845 | (8) |
| | | | | | | | | | | | | | | | | | |
| | Total | | $ | 1,252,500 | | | $ | 1,252,500 | | | $ | 4,105,000 | | | $ | 8,869,345 | |
| | | | | | | | | | | | | | | | | | |
Matthew V. Hairford | | Salary | | $ | — | | | $ | — | | | $ | 750,000 | (9) | | $ | 1,500,000 | (4) |
| | Bonus | | | 519,000 | (5) | | | 519,000 | (5) | | | 778,500 | (10) | | | 1,557,000 | (7) |
| | Vesting equity | | | — | | | | — | | | | — | | | | 1,569,040 | (8) |
| | | | | | | | | | | | | | | | | | |
| | Total | | $ | 519,000 | | | $ | 519,000 | | | $ | 1,528,500 | | | $ | 4,626,039 | |
| | | | | | | | | | | | | | | | | | |
David E. Lancaster | | Salary | | $ | — | | | $ | — | | | $ | 637,500 | (9) | | $ | 1,275,000 | (4) |
| | Bonus | | | 472,500 | (5) | | | 472,500 | (5) | | | 708,750 | (10) | | | 1,417,500 | (7) |
| | Vesting equity | | | — | | | | — | | | | — | | | | 2,026,901 | (8) |
| | | | | | | | | | | | | | | | | | |
| | Total | | $ | 472,500 | | | $ | 472,500 | | | $ | 1,346,250 | | | $ | 4,719,401 | |
| | | | | | | | | | | | | | | | | | |
Craig N. Adams | | Salary | | $ | — | | | $ | — | | | $ | 637,500 | (9) | | $ | 1,275,000 | (4) |
| | Bonus | | | 442,500 | (5) | | | 442,500 | (5) | | | 663,750 | (10) | | | 1,327,500 | (7) |
| | Vesting equity | | | — | | | | — | | | | — | | | | 1,092,575 | (8) |
| | | | | | | | | | | | | | | | | | |
| | Total | | $ | 442,500 | | | $ | 442,500 | | | $ | 1,301,250 | | | $ | 3,695,075 | |
| | | | | | | | | | | | | | | | | | |
Van H. Singleton, II | | Salary | | $ | — | | | $ | — | | | $ | 487,500 | (9) | | $ | 975,000 | (4) |
| | Bonus | | | 370,000 | (5) | | | 370,000 | (5) | | | 555,000 | (10) | | | 1,110,000 | (7) |
| | Vesting equity | | | — | | | | — | | | | — | | | | 829,998 | (8) |
| | | | | | | | | | | | | | | | | | |
| | Total | | $ | 370,000 | | | $ | 370,000 | | | $ | 1,042,500 | | | $ | 2,914,998 | |
| | | | | | | | | | | | | | | | | | |
(1) | 74Matador Resources Company | 2024 Proxy Statement
| | | | | | | | | | | | | | | | | | | | | | Payment Upon Change in Control or Termination | | Named Executive Officer | Category of Payment | Upon Death or Total Disability ($)(1) | Upon Mutual Agreement or Dissolution/Liquidation ($)(1) | Termination by Us Without Just Cause or by Named Executive Officer for Good Reason ($)(1) | Termination Following a Change in Control Without Cause or by Named Executive Officer With or Without Good Reason ($)(2) | Change in Control Without Termination ($)(3) | | Joseph Wm. Foran | Salary | — | | — | | 2,700,000(4) | 4,050,000(5) | — | | | Bonus | 3,105,000(8) | 3,105,000(8) | 6,210,000(7) | 9,315,000(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | 4,792,616 | | — | | | PSUs | — | | — | | — | | 3,101,542 | | 3,101,542 | | | Total | 3,105,000 | | 3,105,000 | | 8,910,000 | | 21,259,158 | | 3,101,542 | | | Van H. Singleton, II | Salary | — | | — | | 1,200,000(10) | 2,400,000(5) | — | | | Bonus | 1,559,688(6) | 1,559,688(6) | 2,339,531(11) | 4,679,063(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | 2,241,762 | | — | | | PSUs | — | | — | | — | | 1,508,780 | | 1,508,780 | | | Total | 1,559,688 | | 1,559,688 | | 3,539,531 | | 10,829,605 | | 1,508,780 | | | Brian J. Willey | Salary | — | | — | | 900,000(10) | 1,800,000(5) | — | | | Bonus | 970,000(6) | 970,000(6) | 1,455,000(11) | 2,910,000(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | — | | — | | | PSUs | — | | — | | — | | 794,448 | | 794,448 | | | Restricted stock | | | | 1,132,992 | | | | Total | 970,000 | | 970,000 | | 2,355,000 | | 6,637,440 | | 794,448 | | | Billy E. Goodwin | Salary | — | | — | | 1,200,000(10) | 2,400,000(5) | — | | | Bonus | 1,559,688(6) | 1,559,688(6) | 2,339,531(11) | 4,679,063(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | 2,298,622 | | — | | | PSUs | — | | — | | — | | 1,508,780 | | 1,508,780 | | | Total | 1,559,688 | | 1,559,688 | | 3,539,531 | | 10,886,465 | | 1,508,780 | | | Craig N. Adams | Salary | — | | — | | 1,200,000(10) | 2,400,000(5) | — | | | Bonus | 1,559,688(6) | 1,559,688(6) | 2,339,531(11) | 4,679,063(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | 2,298,622 | | — | | | PSUs | — | | — | | — | | 1,508,780 | | 1,508,780 | | | Total | 1,559,688 | | 1,559,688 | | 3,539,531 | | 10,886,465 | | 1,508,780 | | | Michael D. Frenzel | Salary | — | | — | | 225,000(10) | 900,000(5) | — | | | Bonus | 613,125(6) | 613,125(6) | 306,563(11) | 1,226,250(8) | — | | | Vesting equity:(9) | | | | | | | Phantom Units | — | | — | | — | | — | | — | | | PSUs | — | | — | | — | | 652,298 | | 652,298 | | | Restricted stock | | | | 1,132,992 | | | | Total | 613,125 | | 613,125 | | 531,563 | | 3,911,540 | | 652,298 | |
(1)Amounts due upon death, total disability, mutual agreement, dissolution or liquidation, termination by us without cause or termination by a Named Executive Officer for good reason are payable in a lump sum on the 60th day following the date of termination unless otherwise required by Section 409A of the Code. Messrs. Willey and Frenzel employment agreements do not include a provision allowing them to terminate for “good reason” except following a change in control. (2)Amounts due following a change in control are payable in a lump sum on the date that immediately follows six months from the date of termination or, if earlier, within 30 days following such Named Executive Officer’s death. 75Matador Resources Company | 2024 Proxy Statement
(3)Pursuant to the terms of the PSU award agreements, upon a “change in control,” the Named Executive Officer would vest in the number of PSUs that would have otherwise vested based on the Company’s performance through an abbreviated performance period that ends immediately prior to the effective date of such change in control. The amount shown assumes achievement of the 50th percentile with 100% of target units vesting. (4)Represents two times such Named Executive Officer’s base salary as of the termination date. (5)Represents three times, or in the case of Mr. Frenzel two times, such Named Executive Officer’s base salary as of the termination date. (6)Represents an amount equal to the average annual cash bonus pursuant to the Cash Incentive Plan paid to such Named Executive Officer for 2023 and 2022, respectively. (7)Represents two times an amount equal to the average annual cash bonus pursuant to the Cash Incentive Plan paid to such Named Executive Officer for 2023 and 2022, respectively. (8)Represents three times, or in the case of Mr. Frenzel two times, an amount equal to the average annual cash bonus pursuant to the Cash Incentive Plan paid to such Named Executive Officer for 2023 and 2022, respectively. (9)The employment agreements provide for accelerated and full vesting of unvested incentive awards held by the Named Executive Officers in the event that such Named Executive Officer is terminated without “Just Cause” or terminates his employment with or without “Good Reason,” with respect to Mr. Foran, within 30 days prior to, or 12 months following, a “change in control.” With respect to Messrs. Singleton, Willey, Goodwin, Adams and Frenzel, the employment agreements provide for accelerated and full vesting of unvested incentive awards held by these Named Executive Officers in the event that such Named Executive Officer is terminated without “Just Cause” or terminates his employment with “Good Reason,” within 30 days prior to, or 12 months following, a “change in control.” The amounts disclosed reflect the closing price of our Common Stock on December 29, 2023 of $56.86 per share multiplied by the number of unvested phantom units, restricted stock or PSUs, as applicable, held by such Named Executive Officer on December 31, 2023. Pursuant to the terms of the PSU award agreements, upon a change in control, the Named Executive Officer would vest in the number of PSUs that would have otherwise vested based on the Company’s performance through an abbreviated performance period that ends immediately prior to the effective date of such event. With respect to PSUs, the amount shown assumes achievement of the 50th percentile with 100% of target units vesting. (10)Represents 1.5 times, or in the case of Mr. Frenzel 0.5 times, such Named Executive Officer’s base salary as of the termination date. (11)Represents 1.5 times, or in the case of Mr. Frenzel 0.5 times, an amount equal to the average annual cash bonus pursuant to the Cash Incentive Plan paid to such Named Executive Officer for 2023 and 2022, respectively.
Mr. Adams retired as an executive officer effective March 6, 2024 and Mr. Goodwin retired as an executive officer effective April 10, 2024. Each of Messrs. Adams and Goodwin received or will receive all arrearages of their base salary, accrued but unused vacation and expenses as of the end of their employment. Each of Messrs. Adams and Goodwin forfeited or will forfeit their outstanding unvested equity awards as of the end of their employment.
76Matador Resources Company | 2024 Proxy Statement
CHIEF EXECUTIVE OFFICER PAY RATIO CHIEF EXECUTIVE OFFICER PAY RATIO
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K (“Item 402(u)”), we are providing the following information regarding the ratio of the annual total compensation of our median-compensated employee (as described below) and that of our Chairman and Chief Executive Officer, Joseph Wm. Foran. We believe that the pay ratio reflected below is a reasonable estimate calculated in a manner consistent with Item 402(u).
The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pursuant to Item 402(u), we identified the median-compensated employee of all our employees (other than Mr. Foran) using our employee population as of December 15, 2023, which consisted of 394 employees (all of which are located in the United States), and using a compensation measure of total cash compensation, consisting of total base pay and bonuses earned during the year ended December 31, 2023. This compensation measure was consistently applied to all employees. Compensation was annualized on a straight-line basis for employees who did not work all of 2023.
After identifying the median-compensated employee using this consistently applied compensation measure, we then calculated that employee’s 2023 annual total compensation in the same manner as the Named Executive Officers’ total compensation, as reported in the Summary Compensation Table.
For 2023, the annual total compensation of our median-compensated employee was $209,035, and the annual total compensation of Mr. Foran was $8,056,599, as reported in the Summary Compensation Table. Based on this information, for 2023, the ratio of Mr. Foran’s annual total compensation to the annual total compensation of our median-compensated employee was estimated to be 39 to 1.
77Matador Resources Company | 2024 Proxy Statement
PAY VERSUS PERFORMANCE PAY VERSUS PERFORMANCE
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” and certain financial performance of the Company. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, see “Executive Compensation—Compensation Discussion and Analysis.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Year (a) | Summary Compensation Table Total for Principal Executive Officer (“PEO”)(1) (b) | Compensation Actually Paid to PEO(2) (c) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) (d) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(4) (e) | Value of Initial Fixed $100 Investment Based On: | Net Income (thousands)(7) (h) | Adj. EBITDA (thousands)(8) (i) | Total Shareholder Return(5) (f) | Peer Group Total Shareholder Return(6) (g) | | 2023 | $8,056,599 | $7,633,074 | $3,542,613 | $3,274,057 | $323.31 | $208.67 | $846,074 | $1,849,547 | | 2022 | $8,951,318 | $21,872,248 | $3,126,314 | $7,943,940 | $321.55 | $196.87 | $1,214,206 | $2,127,156 | | 2021 | $9,057,189 | $27,355,621 | $4,310,734 | $12,883,431 | $206.28 | $140.32 | $584,968 | $1,051,973 | | 2020 | $1,689,547 | $4,092,405 | $923,071 | $2,032,796 | $67.11 | $102.23 | $(593,205) | $519,277 |
(1) The dollar amounts reported in column (b) are the amounts reported for Mr. Foran for each of the corresponding years in the “Total” column of the Summary Compensation Table. See “Executive Compensation—Summary Compensation Table”. (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Foran, as computed in accordance with Item 402(v) of Regulation S-K and do not reflect the total compensation actually realized or received by Mr. Foran. In accordance with these rules, these amounts reflect the amounts included in the “Total” column of the Summary Compensation Table for each year, adjusted for 2023 as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant.
| | | | | | | Compensation Actually Paid to PEO | 2023 | | Summary Compensation Table Total | $8,056,599 | | Less, value of “Stock Awards” reported in Summary Compensation Table | $(3,575,900) | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | $2,916,800 | | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years | $(95,251) | | Plus (less), change in fair value from prior year-end to vesting date of equity awards granted in prior years that vested in the year | $330,826 | | Compensation Actually Paid to Mr. Foran | $7,633,074 |
(3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Named Executive Officers as a group (excluding Mr. Foran) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the Named Executive Officers included for these purposes in each applicable year are as follows: (i) for 2023, Messrs. Singleton, Willey, Goodwin, Adams and Frenzel; (ii) for 2022, Messrs. Goodwin, Singleton, Adams, Frenzel and David E. Lancaster and (iii) for 2021 and 2020, Messrs. Adams, Goodwin, Lancaster and Matthew V. Hairford. (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the Named Executive Officers as a group (excluding Mr. Foran), as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rules, these amounts reflect the amounts in the “Total” column of the Summary Compensation Table for each year, adjusted for 2023 as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant.
78Matador Resources Company | 2024 Proxy Statement
| | | | | | Average Compensation Actually Paid to Non-PEO Named Executive Officer for good reason are payableOfficers | 2023 | | Average Summary Compensation Table Total | $3,542,613 | Less, average value of "Stock Awards" reported in a lump sum onSummary Compensation Table | $(1,434,807) | Plus, average year-end fair value of outstanding and unvested equity awards granted in the sixtieth day following theyear | $976,698 | | Plus (less), average year over year change in fair value of outstanding and unvested equity awards granted in prior years | $(35,851) | Plus (less), average change in fair value from prior year-end to vesting date of termination unless otherwise required by Section 409A ofequity awards granted in prior years that vested in the Code.year | $225,404 |
(2) | Amounts due following a change in control are payable in a lump sum on the date which immediately follows six months from the date of termination or, if earlier, within 30 days of such Average Compensation Actually Paid to Non-PEO Named Executive Officer’s death.Officers | $3,274,057 |
(3) | Represents two times such Named Executive Officer’s base salary as of the termination date. |
(4) | Represents three times such Named Executive Officer’s base salary as of the termination date. |
(5) | Represents the average annual amount of bonuses, including pursuant to the 2014 and 2015 Incentive Programs, paid to such Named Executive Officer with respect to prior two calendar years (2014-2015). |
(6) | Represents two times an amount equal to the average annual amount of bonuses, including pursuant to the 2014 and 2015 Incentive Programs, paid to such Named Executive Officer with respect to prior two calendar years (2014-2015). |
(7) | Represents three times an amount equal to the average annual amount of bonuses, including pursuant to the 2014 and 2015 Incentive Programs, paid to such Named Executive Officer with respect to prior two calendar years (2014-2015). |
(8) | The employment agreements provide for accelerated and full vesting of unvested incentive awards held by these Named Executive Officers in the event that such Named Executive Officer is terminated without “Just Cause” or terminates his employment with or without “Good Reason,” with respect to Messrs. Foran, Hairford and Lancaster, within 30 days prior to, or 12 months following, a “change in control.” With respect to Messrs. Adams and Singleton, the employment agreements provide for accelerated and full vesting of unvested incentive awards held by these Named Executive Officers in the event that such Named Executive Officer is terminated without “Just Cause” or terminates his employment with “Good Reason,” within 30 days prior to, or 12 months following, a “change in control.” The amount disclosed reflects the closing price of our Common Stock on December 31, 2015 of $19.77 per share multiplied by the number of unvested service-based shares of restricted stock held by such Named Executive Officer on December 31, 2015, in addition to the intrinsic value of the stock options held by such Named Executive Officer based upon the exercise price of such stock options being less than the closing price of our Common Stock on December 31, 2015. |
(9) | Represents 1.5 times such Named Executive Officer’s base salary as of the termination date. |
(10) | Represents 1.5 times an amount equal to the average annual amount of bonuses, including pursuant to the 2014 and 2015 Incentive Programs, paid to such Named Executive Officer with respect to prior two calendar years (2014-2015). |
(5) Total Shareholder Return (“TSR”) is calculated by dividing (a) the sum of (i) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (ii) the difference between the Company’s share price at the end of each fiscal year shown and the beginning of the measurement period by (b) the Company’s share price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2019. (6) The peer group used for this purpose is the following published industry index: Russell 2000 Energy Index. (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. (8) We determined Adjusted EBITDA to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO Named Executive Officers in 2023. Adjusted EBITDA is a non-GAAP financial Measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Matador’s net income (loss) and net cash provided by operating activities, see Annex A to this Proxy Statement. This performance measure may not have been the most important financial performance measure for prior years and we may determine a different financial performance measure to be the most important financial performance measure in future years.
Description of Certain Relationships between Information Presented in the Pay versus Performance Table
As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table.
79Matador Resources Company | 2024 Proxy Statement
80Matador Resources Company | 2024 Proxy Statement
Financial Performance Measures
As described in greater detail under “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on an objective of incentivizing our Named Executive Officers to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s Named Executive Officers, for the most recently completed fiscal year, to the Company’s performance are as follows:
1.Total Shareholder Return 2.Adjusted EBITDA 3.Net Debt / Adjusted EBITDA 4.Adjusted Operating Costs per BOE 5.Return on Average Capital Employed 81Matador Resources Company | 2024 Proxy Statement
DIRECTOR COMPENSATION | | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash
($) | | | Stock
Awards
($) | | | Restricted
Stock Units (1)
($) | | | All Other
Compensation
($) | | | Total
($) | | Reynald A. Baribault | | | 87,000 | | | | — | | | | 99,986 | | | | — | | | | 186,986 | | David M. Laney (2) | | | 116,000 | | | | — | | | | 99,986 | | | | — | | | | 215,986 | | Gregory E. Mitchell | | | 70,000 | | | | — | | | | 99,986 | | | | — | | | | 169,986 | | Steven W. Ohnimus | | | 72,000 | | | | — | | | | 99,986 | | | | — | | | | 171,986 | | Michael C. Ryan (3) | | | 36,000 | | | | — | | | | 49,712 | | | | — | | | | 85,712 | | Carlos M. Sepulveda, Jr. (2) | | | 125,000 | | | | — | | | | 99,986 | | | | — | | | | 224,986 | | Margaret B. Shannon | | | 76,000 | | | | — | | | | 99,986 | | | | — | | | | 175,986 | | Don C. Stephenson (2)(4) | | | 77,000 | | | | — | | | | 50,274 | | | | — | | | | 127,274 | | George M. Yates (5) | | | 50,000 | | | | — | | | | 75,051 | | | | — | | | | 125,051 | |
(1) | Based on the fair market value of the restricted stock units on the date of grant. Subject to a three year ratable vesting period. |
(2) | Includes $40,000 earned by the director for additional committee service provided during 2015. |
(3) | Mr. Ryan retired from the Board of Directors effective June 10, 2015. |
(4) | Mr. Stephenson joined the Board of Directors on July 6, 2015. |
(5) | Mr. Yates joined the Board of Directors on April 28, 2015. |
DIRECTOR COMPENSATION
| | | | | | | | | | | | | | | | Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation | Total | Shelley F. Appel(2) | $67,333 | $134,982 | $— | $202,315 | | Reynald A. Baribault | $170,000 | $134,982 | $— | $304,982 | R. Gaines Baty(3) | $178,333 | $134,982 | $— | $313,315 | | William M. Byerley | $120,000 | $134,982 | $— | $254,982 | | Monika U. Ehrman | $90,833 | $134,982 | $— | $225,815 | | James M. Howard | $90,833 | $134,982 | $— | $225,815 | Timothy E. Parker(4) | $190,833 | $134,982 | $— | $325,815 | | Julia P. Forrester Rogers | $105,000 | $134,982 | $— | $239,982 | | Kenneth L. Stewart | $76,250 | $134,982 | $— | $211,232 | | | | | |
(1)All stock awards represent RSUs with a value based on the fair market value of the RSUs on the date of grant. RSUs granted for 2023-2024 service vest immediately prior to the election of the nominees for director at the 2024 Annual Meeting. See “—Compensation for 2015During 2015, we targeted2023-2024.” As of December 31, 2023, each individual who served as a director during 2023 held the following outstanding unvested stock awards, all of which were RSUs.
| | | | | | | Name | Outstanding Stock Awards | | Shelley F. Appel | 2,621 | | Reynald A. Baribault | 2,621 | | R. Gaines Baty | 2,621 | | William M. Byerley | 2,621 | | Monika U. Ehrman | 2,621 | | James M. Howard | 2,621 | | Timothy E. Parker | 2,621 | | Julia P. Forrester Rogers | 2,621 | | Kenneth L. Stewart | 2,621 |
(2)Ms. Appel was elected to the Board at the 2023 Annual Meeting and serves as ESG coordinator. The ESG coordinator receives an additional cash retainer of $50,000 annually. (3)Mr. Baty serves as deputy lead independent director. The deputy lead independent director receives an additional cash retainer of $50,000 annually. (4)Mr. Parker serves as lead independent director. The lead independent director receives an additional cash retainer of $100,000 annually.
Ms. Ward was appointed to the Board on January 24, 2024 and did not receive any director compensation in 2023. Because Ms. Ward was appointed to the Board more than 180 days but fewer than 270 days after the 2023 Annual Meeting, upon her appointment, Ms. Ward was granted 1,311 RSUs, representing 50% of the RSUs that the other members of the Board received in 2023.
82Matador Resources Company | 2024 Proxy Statement
Compensation for 2023-2024
For the period commencing at the 2023 Annual Meeting and until the 2024 Annual Meeting, our non-employee directors’ compensation to approximate the 50th percentile of the Peer Group used for benchmarking the non-employee directors’ compensation. During 2015, our director compensation program was the following:as set forth below: •annual cash retainer of $60,000;$70,000; •the chair of $1,000 per day for each day of Board and committee service; the chairs of the Audit Committee andbelow committees received the Operations and Engineering Committee eachfollowing additional, annual cash retainer:
| | | | | | | Committee | Retainer | | Operations and Engineering | $50,000 | | Prospect | $50,000 | | Audit | $50,000 | | Strategic Planning and Compensation | $50,000 | | Environmental, Social and Corporate Governance | $35,000 | | Nominating | $25,000 | | Capital Markets and Finance | $25,000 | | Marketing and Midstream | $25,000 |
•the lead independent director received an additional cash retainer of $15,000 annually and $100,000;
•the chairs of the Nominating, Compensation and Planning Committee and the Corporate Governance Committee eachdeputy lead independent director received an additional cash retainer of $5,000 annually; and$50,000; each non-employee director received restricted stock units (“RSUs”) equal to up to $100,000 in value annually with
•the restrictions lapsing in one-third increments on each of the first, second and third anniversaries of the date of grant. Each grant was subject to downward (but not upward) adjustment in value based upon the non-employee director’s attendance and contributions at Board or committee meetings called during the period for which RSUs were due. In addition, we reimbursed our directors for travel, lodging and related expenses incurred in attending Board and committee meetings.
Compensation for 2016
For 2016, our non-employee directors’ compensation program has been adjusted as set forth below:
annual cash retainer of $54,000;
cash meeting fee of $1,000 per day for each day of Board and committee service;
the chair of the Audit Committee will receiveESG coordinator received an additional cash retainer of $25,000 annually$50,000; and
•at the chairsmeeting of the Nominating, Compensation and Planning Committee,Board immediately following the Corporate Governance Committee, the Prospect Committee and the Operations and Engineering Committee will each receive an additional cash retainer of $15,000 annually; and 2023 Annual Meeting, each non-employee director receivesreceived an annual grant of RSUs equal to up toapproximately $135,000 in value, annually withwhich vests on the restrictions lapsing in one-third increments on eachearlier of the first second and third anniversariesanniversary of the 2023 Annual Meeting or immediately prior to the election of the nominees for director at the 2024 Annual Meeting (the “2023 RSU Award”).
If a director was appointed or elected to the Board at any time following the 2023 Annual Meeting but prior to the 2024 Annual Meeting, such director was granted the applicable percentage of the 2023 RSU Award detailed below, effective on the date of grant. Eachsuch director’s appointment: (i) if a director was appointed or elected to the Board within 90 days after the 2023 Annual Meeting, such director was entitled to receive 100% of the 2023 RSU Award; (ii) if a director was appointed or elected to the Board more than 90 days but 180 or fewer days after the 2023 Annual Meeting, such director was entitled to receive 75% of the 2023 RSU Award; (iii) if a director was appointed or elected to the Board more than 180 days but 270 or fewer days after the 2023 Annual Meeting, such director was entitled to receive 50% of the 2023 RSU Award; and (iv) if a director was appointed or elected to the Board more than 270 days after the 2023 Annual Meeting but prior to the 2024 Annual Meeting, such director was entitled to receive 25% of the 2023 RSU award. Ms. Ward was appointed to the Board effective January 24, 2024, which date was more than 180 days but fewer than 270 days after the 2023 Annual Meeting. As a result, Ms. Ward received a grant may be adjusted downward (but not upward) in value based uponof 1,311 RSUs, representing 50% of the non-employee director’s attendance and contributions at Board or committee meetings called during the period for which RSUs are due.2023 RSU Award.
In addition, we will continue to reimburse our directors for travel, lodging and related expenses incurred in attending Board and committee meetings.
Director Stock Ownership Guidelines The
Our non-employee directors are expected to follow our voluntary stock ownership guidelines for non-employee directors. Within three years of becoming a director, each non-employee director will beis expected to own $250,000 of Common Stock and continue to hold such shares while serving as a director. AllAs of December 31, 2023, all directors and director nominees ownowned in excess of $250,000 of Common Stock and presently meet this standard.Stock. Shares which willthat count toward the stock ownership guidelines include time-lapse restricted stock or RSUs that are still restricted and any shares held in trust by the director or his or her immediate family over which he or she has direct beneficial ownership interest. Shares which will not count toward the stock ownership guidelines include shares underlying unexercised stock options and unexercised stock appreciation rights.Special Board Advisor Compensation
Our special Board advisors are compensated with stock and/or cash awards based upon meeting attendance or as otherwise agreed to pursuant to consulting arrangements with such advisors. We reimburse our special Board advisors for travel, lodging and related expenses incurred in attending Board and committee meetings. Mr. Downey’s special Board advisor compensation is the same as for the non-employee directors as described above.
RSUs. 83Matador Resources Company | 2024 Proxy Statement
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table presents the securities authorized for issuance under our equity compensation plans as of December 31, 2015. | | | | | | | | | | | | | Plan Category | | Number of
Shares to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants
and
Rights | | | Weighted-
Average
Exercise
Price of
Outstanding
Options,
Warrants
and Rights | | | Number of
Shares
Remaining
Available for
Future
Issuance
Under Equity
Compensation
Plans | | Equity compensation plans approved by security holders (1)(2) | | | 2,436,784 | | | $ | 15.40 | | | | 5,066,503 | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 2,436,784 | | | $ | 15.40 | | | | 5,066,503 | | | | | | | | | | | | | | |
(1) | Our Board has determined not to make any additional awards under the Matador Resources Company 2003 Stock and Incentive Plan. |
(2) | The Amended and Restated 2012 Long-Term Incentive Plan was adopted by our Board of Directors in April 2015 and approved by our shareholders on June 10, 2015. |
2023:
| | | | | | | | | | | | | Committee | Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(2) | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights(3) | Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans | Equity compensation plans approved by security holders(1) | 837,646 | $18.03 | 8,422,916 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 837,646 | $18.03 | 8,422,916 |
(1) Includes shares authorized under the Matador Resources Company Amended and Restated 2012 Long-Term Incentive Plan (as amended, the “2012 Plan”), the 2019 Plan and the Matador Resources Company 2023 Employee Stock Purchase Plan. No further awards may be made under the 2012 Plan, although awards remain outstanding thereunder. (2) Includes the number of PSUs granted under the 2012 Plan and the 2019 Plan based on the maximum level of achievement, which may be more than the number of shares issued in settlement of PSUs that are ultimately earned. (3) Reflects the weighted-average exercise price of stock options granted under the 2012 Plan and 2019 Plan. RSUs and PSUs are not reflected in this column as they do not have an exercise price. 84Matador Resources Company | 2024 Proxy Statement
TRANSACTIONS WITH RELATED PERSONS TRANSACTIONS WITH RELATED PERSONS
Except as disclosed below, since January 1, 2015,during 2023, there haswas not, been, nor iswas there currently proposed as of December 31, 2023, any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, nominees for directors, executive officers, holdersbeneficial owners of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers, which are described in “Executive Compensation —Compensation— Compensation Discussion and Analysis” and “Director Compensation” above. In June 2015, the Company entered into two joint ventures (the “Joint Ventures”) to develop certain leasehold interests held by certain affiliates (the “HEYCO Affiliates”) of HEYCO Energy Group, Inc., the former parent company of HEYCO. The HEYCO Affiliates are owned by George M. Yates, who was appointed to the Board on April 28, 2015 in accordance with the terms of the HEYCO Merger,
Working Interest and Overriding Royalty Interest Owners
Joseph Wm. Foran, Chairman and Chief Executive Officer, Shelley F. Appel, director, and certain of his affiliates. Pursuanttheir affiliated entities (collectively, the “Foran Entities”) are working interest owners and/or overriding royalty interest owners in certain properties operated by the Company. As working interest owners, the Foran Entities are required to pay their proportionate share of all costs and are entitled to receive their proportionate share of revenues in the normal course of business. As overriding royalty interest owners, the Foran Entities are entitled to receive their proportionate share of revenues from the wells in which they own an interest in the normal course of business. During 2023, revenues, net of costs, received by the Foran Entities in their capacity as working interest owners or overriding royalty interest owners were approximately $19.9 million (the “Related Net Revenue Payments”). The Related Net Revenue Payments represent less than 1% of our total third-party net revenue payments during 2023.
In our capacity as operator, we incur drilling and operating costs that are billed to our partners based on their respective working interests. During 2023, our joint interest billings to the termsForan Entities attributable to their share of costs were approximately $23.3 million (the “Related Joint Interest Billings”). The Related Joint Interest Billings represent less than 1% of our total joint interest billings during 2023. As a result of this ownership by the Foran Entities, from time to time, we will be in a net receivable or net payable position with certain of the transaction,Foran Entities. We do not consider any net receivables from the HEYCO Affiliates contributed an aggregate of approximately 1,900 net acres, primarily in the same properties previously held by HEYCO,Foran Entities to the two newly-formed entities in exchange for a 50% interest in each entity. The Company has agreed to contribute an aggregate of approximately $14 million in exchange for the other 50% interest in both entities. As of December 31, 2015, the Company had contributed an aggregate of approximately $0.7 million to the two entities. The Company’s contributions will be used to fund future capital expenditures associated with the interests being acquired as well as to fund acquisitions of other non-operated acreage opportunities.uncollectible.
The Audit Committee reviewed the terms of the Joint Venturesworking interests and/or overriding royalty interests of the Foran Entities for potential conflicts of interest under the Company’s related party transaction policy, effective October 12, 2011 (the “Related Party Transaction Policy”), and, after being fully informed as to Mr. Yates’ relationship and interest and all other material facts related to the Joint Ventures, determined that the Joint Ventures were fair to the Company and recommended the Joint Ventures to the full Board for approval. The Board subsequently approved such Joint Ventures.In addition, in light of Mr. Yates’ ongoing services to HEYCO Energy Group, Inc., the Board, in accordance with Texas corporate law, adopted resolutions which renounce and provide for a waiver of certain corporate opportunities with respect to Mr. Yates. As a result, Mr. Yates will have no fiduciary duty to present certain corporate opportunities related to Mr. Yates’ existing oil and gas holdings and/or in areas where Matador does not currently operate.
Additionally, substantially all of the oil production from the wells acquired in the HEYCO Merger was subject to pre-existing sales contracts with an entity owned by affiliates of HEYCO Energy Group, Inc. The Company recorded revenue of $1.1 million for oil sold pursuant to such contracts for the year ended December 31, 2015. The Audit Committee reviewed the terms of the sales contracts for potential conflicts of interest under the Company’s Related PartyPerson Transaction Policy, and, after being fully informed as to Mr. Yates’ relationshipForan’s and interestMs. Appel's relationships and interests in such transactions and all other material facts related to the sales contracts,Related Net Revenue Payments and Related Joint Interest Billings, determined that such transactions and the sales contractsRelated Net Revenue Payments and Related Joint Interest Billings were fair to the Company and recommended such transactions and the sales contractsRelated Net Revenue Payments and Related Joint Interest Billings to the full Board for approval and ratification. The Board subsequently approved and ratified such sales contracts. Such contracts were terminatedthe transactions and the Related Net Revenue Payments and Related Joint Interest Billings.
Joint Venture Relationship
The Company has entered into a joint venture (the “Joint Venture”) with Spearpoint Resources Company (“Spearpoint”) to generate value through a well development program in our Twin Lakes asset area. An adult child of Mr. Foran and the sibling of Ms. Appel is the founder of Spearpoint and serves as the chief executive officer and chairman of the board of directors of Spearpoint. Mr. Foran’s child has a Bachelor of Arts degree in Economics from Princeton University, a Master’s of Science degree in Petroleum Engineering from Texas A&M University and a Master’s degree in Business Administration from Rice University. Mr. Foran’s child worked for a major oil and gas company as a petroleum petrophysicist. Prior to attending Texas A&M, Mr. Foran’s child served in the third quarterUnited States Marine Corp, including two tours of 2015.duty overseas, and has continued to serve in United State Marine Corp Reserve, recently achieving the rank of Major. Mr. Foran’s child may perform shared services to the Joint Venture, for which the Joint Venture would reimburse Spearpoint. In addition, Ms. Appel holds an ownership interest in Spearpoint.
85Matador Resources Company | 2024 Proxy Statement
During 2023, the Company made capital contributions to the Joint Venture of approximately $3.1 million (the “Capital Contributions”) and was compensated approximately $0.9 million pursuant to the terms of the Joint Venture’s operating agreement for the provision of shared services to the Joint Venture in 2023 and Spearpoint made capital contributions to the Joint Venture of approximately $3.0 million and was compensated approximately $0.5 million in total pursuant to the terms of the Joint Venture’s operating agreement for the provision of shared services to the Joint Venture in 2021, 2022 and 2023. Neither the Company nor Spearpoint received any distributions from the Joint Venture in 2023, although such distributions may be received by the Company and/or Spearpoint in the future.
The Audit Committee reviewed the terms of the Joint Venture for potential conflicts of interest under the Related Person Transaction Policy, and, after being fully informed as to Mr. Foran’s and his adult child’s relationships and interests in such transactions and all other material facts related to the Joint Venture, determined that such transactions, including the Capital Contributions, were fair to the Company and recommended such transactions to the full Board for approval and ratification. The Board subsequently approved and ratified the transactions, including the Capital Contributions.
Certain Employment Relationships
Billy E. Goodwin Senior Vice President — Operations, was appointedserved as an executive officer during 2023 until his retirement in April of the Company in connection with his February 2016 promotion to his present role. Two2024. During 2023, an adult child of Mr. Goodwin’s adult children are employeesGoodwin was an employee of the Company and are eachhas been an employee since 2015. Mr. Goodwin’s child earned in 2023, and is expected to be compensated in 2024, between $120,000 and $300,000$500,000. Mr. Goodwin’s child has a Bachelor of Science in 2016.Business Administration degree in Energy Management from the University of Tulsa and a Bachelor of Arts degree in General Business and Management from Oklahoma State University. He has over 13 years of industry experience, including as a drilling fluids engineer for a publicly traded oilfield services company and as a landman for a publicly traded exploration and production company. The Audit Committee reviewed the terms of the employment arrangementsarrangement for potential conflicts of interest under the Company’s Related PartyPerson Transaction Policy and, after being fully informed as to the employment arrangementsarrangement and historical and anticipated compensation of Mr. Goodwin’s adult children,child, and all other material facts related to the relationship, determined that the employment arrangements werearrangement was fair to the Company and recommended the employment arrangementsarrangement to the full Board for approval and ratification. The Board subsequently approved and ratified such employment arrangements.
Reynald A. Baribault is a member of the Board. Mr. Baribault’s sister-in-law has been an employee of the Company since 2016 and earned in 2023, and is expected to be compensated in 2024, between $120,000 and $250,000. Mr. Baribault’s sister-in-law has a diploma from the Executive Secretarial School and is a certified legal assistant, having completed the Southern Methodist University Legal Assistants Program. She has over 40 years of experience as a legal assistant. The Audit Committee reviewed the terms of the employment arrangement for potential conflicts of interest under the Company’s Related Person Transaction Policy and, after being fully informed as to the employment arrangement and historical and anticipated compensation of Mr. Baribault’s sister-in-law, and all other material facts related to the relationship, determined that the employment arrangement was fair to the Company and recommended the employment arrangement to the full Board for approval and ratification. The Board subsequently approved and ratified such employment arrangement.
An adult child of Mr. Foran and a sibling of Ms. Appel has been an employee of the Company since 2015 and earned in 2023, and is expected to be compensated in 2024, between $120,000 and $250,000. Mr. Foran’s child has a Bachelor of Science degree in Human Resource Development and a Master of Science degree in Human Resource Management, both from Texas A&M University. She has more than 12 years of industry experience, including with another publicly traded exploration and production company. The Audit Committee reviewed the terms of the employment arrangement for potential conflicts of interest under the Company’s Related Person Transaction Policy and, after being fully informed as to the employment arrangement and historical and anticipated compensation of Mr. Foran’s child, and all other material facts related to the relationship, determined that the employment arrangement was fair to the Company and recommended the employment arrangement to the full Board for approval and ratification. The Board subsequently approved and ratified such employment arrangement.
86Matador Resources Company | 2024 Proxy Statement
In addition, Ms. Appel, a director and the daughter of Mr. Foran, served as the Company’s Environmental, Social and Governance Coordinator and as a Special Advisor to the Board in 2023 prior to her election to the Board in June 2023. For these services, Ms. Appel was compensated between $120,000 and $250,000. Ms. Appel has a degree from Yale University and a Master’s degree in Business Administration from the University of Chicago and also worked for a major oil and gas company for a number of years. For further details of Ms. Appel’s relationship with the Company and her background and experience, please see her biography on page 20 of this Proxy Statement. The Audit Committee reviewed the terms of the consulting arrangement for potential conflicts of interest under the Company’s Related Person Transaction Policy and, after being fully informed as to the consulting arrangement and historical and anticipated compensation of Ms. Appel, and all other material facts related to the relationship, determined that the consulting arrangement was fair to the Company and recommended the consulting arrangement to the full Board for approval and ratification. The Board subsequently approved and ratified such consulting arrangement.
Indemnification Agreements
We have entered into indemnification agreements with each of our directors and executive officers and expect to do so in the future for any new directors and executive officers. The indemnification agreements provide the directors and executive officers with contractual rights to indemnification, expense advancement and reimbursement to the fullest extent permitted by applicable law.
Procedures for Approval of Related PartyPerson Transactions
Pursuant to the Related PartyPerson Transaction Policy in effect as of December 31, 2023, a “Related PartyPerson Transaction” is defined as a transaction (including any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness)), or series of related transactions, or any material amendment to any such transaction, involvingin which a Related PartyPerson (as defined below) has or will have a direct or indirect material interest and in which we are a participant, other than: •a transaction involving compensation of directors;directors that is required to be reported in our proxy statement under Item 402 of the SEC’s compensation disclosure requirements (“Item 402”); a transaction involving compensation
•any employment by us of an executive officer if:
◦the related compensation is required to be reported in our proxy statement under Item 402; or
◦the executive officer is not an “immediate family member” of another executive officer or involving an employment agreement, severance agreement, changedirector of the Company, the related compensation would be reported in control provision or agreement orour proxy statement under Item 402 if the executive officer was a special supplemental benefit for an“named executive officer;officer” and the Compensation Committee approved (or recommended that the Board approve) such compensation; a transaction available to all employees generally or to all salaried employees generally;
•a transaction with a Related PartyPerson involving less than $120,000; •a transaction in which the interest of the Related PartyPerson arises solely from the ownership of a class of our equity securities and all holders of that class receive the same benefit on a pro rata basis;
•a transaction in which a Related Person has an indirect interest solely as a result of being (a) a director or, together with all other Related Persons, a less than 10% beneficial owner of an equity interest in another entity, or both, or (b) a limited partner in a partnership in which the Related Person, together with all other Related Persons, has an interest of less than 10%; •a transaction in which the rates or charges involved therein are determined by competitive bids, or a transaction that involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.authority;
•any transaction with another company at which a Related Person’s only relationship is as an employee (other than an executive officer), if the aggregate amount involved does not exceed the greater of $1,000,000, or 2% of that company’s total annual revenues; 87Matador Resources Company | 2024 Proxy Statement
•any charitable contribution, grant or endowment by us to a charitable organization, foundation or university at which a Related Person’s only relationship is as an employee (other than an executive officer), if the aggregate amount involved does not exceed the lesser of $1,000,000, or 2% of the charitable organization’s total annual receipts;
•any transaction with another publicly traded company where the Related Person’s interest arises solely from beneficial ownership of more than 5% of our Common Stock and ownership of a non-controlling interest in the other publicly traded company;
•reimbursement of business expenses incurred by a director, officer or employee of the Company in the performance of his or her duties and approved for reimbursement by the Company in accordance with the Company’s customary policies and practices; or
•indemnification and advancement of expenses made pursuant to the Certificate of Formation or the Bylaws or pursuant to any agreement.
“Related Party”Person” means: •any person who is, or at any time duringsince the applicable periodbeginning of the Company’s last completed fiscal year was, one of our executive officers or one of our directors or nominees for directors;director; •any person (including any entity or group) who is known by us to be the beneficial owner of more than 5% of our Common Stock; •any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law or sister-in-lawperson residing (other than a tenant or employee) in the home of a director, nominee for director, executive officer or a beneficial owner of more than 5% of our Common Stock; and •any firm, corporation or other entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons is a general partner or executive officer or in which such person, together with all other of the foregoing persons, owns 10% or more of the equity interests thereof.
Pursuant to the Related PartyPerson Transaction Policy, the Audit Committee must review all material facts of each Related PartyPerson Transaction and recommend either approval or disapproval of the Related PartyPerson Transaction to the full Board, subject to certain limited exceptions. In determining whether to recommend approval or disapproval of the Related PartyPerson Transaction, the Audit Committee must, after reviewing all material facts of the Related PartyPerson Transaction and the Related Party’sPerson’s relationship and interest, determine whether the Related PartyPerson Transaction is fair to the Company.Company and in, or not consistent with, the interests of the Company and its shareholders. If a Related Person Transaction will be ongoing, the Audit Committee, on at least an annual basis, will review and assess ongoing relationships with the Related Persons to see that they are in compliance with Audit Committee guidelines. Further, the policy requires that all Related PartyPerson Transactions be disclosed in our filings with the SEC and/or our website in accordance with applicable laws, rules and regulations. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
88Matador Resources Company | 2024 Proxy Statement
Security Ownership of Certain Beneficial Owners and Management
The following table presents the beneficial ownership of our Common Stock as of April 26, 201616, 2024 for (i) each person beneficially owning more than 5% of the outstanding shares of our Common Stock, (ii) each director and nominee for director of the Company, (iii) each named executive officer of the Company listed in the Summary Compensation Table and (iv) all of our directors, nominees for director and executive officers as a group. Except pursuant to applicable community property laws and except as otherwise indicated, each shareholder possesses sole voting and investment power with respect to its, his or her shares. The business address of each of our directors nominees for director and executive officers is c/o Matador Resources Company, One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240. The applicable percentage ownership is based on 93,256,049124,780,249 shares of our Common Stock issued and outstanding as of April 26, 2016,16, 2024, plus, on an individual basis, the right of that individual to (i) obtain Common Stock upon exercise of stock options or (ii) obtain Common Stock upon the vesting or delivery of restricted stock units,RSUs, in each case within 60 days of April 26, 2016.16, 2024. The information is based on Form 3s, Form 4s, Form 5s, Schedule 13Ds, Schedule 13Gs and Schedule 13Gs13G/As filed through April 26, 2016. | | | | | | | | | Name | | Amount and
Nature of
Ownership of
Common Stock | | | Percent
of Class | | Directors, Nominees for Director and Named Executive Officers: | | | | | | | | | Joseph Wm. Foran (1) | | | 4,313,478 | | | | 4.6 | % | Craig N. Adams (2) | | | 117,131 | | | | * | | Reynald A. Baribault (3) | | | 27,263 | | | | * | | Matthew V. Hairford (4) | | | 353,398 | | | | * | | David E. Lancaster (5) | | | 473,383 | | | | * | | David M. Laney (6) | | | 480,050 | | | | * | | Gregory E. Mitchell (7) | | | 210,115 | | | | * | | Steven W. Ohnimus (8) | | | 106,850 | | | | * | | Carlos M. Sepulveda, Jr. (9) | | | 300,522 | | | | * | | Margaret B. Shannon (10) | | | 58,265 | | | | * | | Van H. Singleton, II (11) | | | 93,593 | | | | * | | Don C. Stephenson (12) | | | 35,415 | | | | * | | George M. Yates (13) | | | 4,802,800 | | | | 5.2 | % | Craig T. Burkert (14) | | | 70,409 | | | | * | | All Directors, Nominees for Director and Executive Officers as a Group (17 persons) (15): | | | 11,918,486 | | | | 12.7 | % | | | | Other 5% Owners: | | | | | | | | | T. Rowe Price Associates, Inc. (16) | | | 9,180,717 | | | | 9.8 | % | The VanGuard Group (17) | | | 5,225,110 | | | | 5.6 | % | BlackRock, Inc. (18) | | | 4,423,718 | | | | 4.7 | % |
* | Less than one percent (1%) |
(1) | Includes (i) 1,084,933 shares of Common Stock held of record by Sage Resources, Ltd., a limited partnership owned by the Foran family, including Mr. Foran; (ii) 4,000 shares of Common Stock held of record by the reporting person’s spouse through her Individual Retirement Account; (iii) 119,500 shares and 50,000 shares of Common Stock held of record by The Don Foran Family Trust 2008 and The Foran Family Special Needs Trust, respectively, for which Mr. Foran is the co-trustee and over which Mr. Foran has shared voting and investment power with other members of his family; (iv) 370,878 shares of Common Stock held of record by each of theJWF 2011-1 GRAT and the NNF 2011-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (v) 239,963 shares of Common Stock held of record by each of the JWF 2013-1 GRAT and the NNF 2013-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (vi) 22,485 shares of Common Stock held of record by each of the JWF 2014-2 GRAT and the NNF 2014-2 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (vii) 104,048 shares of Common Stock held of record by each of the JWF 2015-1 GRAT and the NNF 2015-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (viii) 109,011 shares of Common Stock held of record by each of the JWF 2015-2 GRAT and the NNF 2015-2 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (ix) 387,418 shares of Common Stock held of record by each of the JWF 2016-1 GRAT and the NNF 2016-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has
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| sole voting and investment power; (x) 43,750 shares of Common Stock held of record by the Foran 2012 Security Trust, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (xi) 165,050 shares of Common Stock held of record by the Foran 2012 Savings Trust, for which Mr. Foran’s spouse is a trustee; (xii) 270 shares held of record by the Individual Retirement Account of Mr. Foran’s adult child, who gave Mr. Foran investment power over such shares through a revocable power of attorney; (xiii) 4,976 shares held of record, collectively, by the LRF 2011 Non-GST Trust, WJF 2011 Non-GST Trust, JNF 2011 Non-GST Trust, SIF 2011 Non-GST Trust and MCF 2011 Non-GST Trust, for which trusts Mr. Foran and his spouse, as settlors of each of the Non-GST Trusts, retain the power of substitution with respect to the property of the Non-GST Trusts; and (xiv) 142,777 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Foran has the right to vote such shares but may only dispose of such shares to the extent they have vested. Also includes 212,043 shares of Common Stock issuable to Mr. Foran upon the exercise of stock options. |
(2) | Includes 46,071 shares of Common Stock issuable to Mr. Adams upon the exercise of stock options. Also includes 52,281 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Adams has the right to vote such shares but may only dispose of such shares to the extent they have vested. |
(3) | Includes 2,000 shares of Common Stock held by the Individual Retirement Account of Mr. Baribault. Also includes 19,000 shares of Common Stock held by the Reynald A. Baribault Maritalized Revocable Living Trust, for which Mr. Baribault has shared voting and investment power with his spouse, and 5,000 shares of Common Stock held by the Sally K. Baribault Maritalized Revocable Living Trust, for which Mr. Baribault has shared voting and investment power with his spouse. Also includes 300 shares of Common Stock issuable to Mr. Baribault upon the vesting of restricted stock units. |
(4) | Includes 126,864 shares of Common Stock issuable to Mr. Hairford upon the exercise of stock options and 5,000 shares held of record by his Individual Retirement Account. Also includes 61,146 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Hairford has the right to vote such shares but may only dispose of such shares to the extent they have vested. Mr. Hairford has pledged 67,400 shares of Common Stock. |
(5) | Includes 134,489 shares of Common Stock issuable to Mr. Lancaster upon the exercise of stock options and 75,500 shares of Common Stock held of record by his Individual Retirement Account. Also includes 68,290 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Lancaster has the right to vote such shares but may only dispose of such shares to the extent they have vested. |
(6) | Includes 66,000 shares of Common Stock held of record by Laney Investments Ltd., for which Mr. Laney has sole voting and investment power. Also includes 1,233 shares of Common Stock issuable to Mr. Laney upon the vesting of restricted stock units. |
(7) | Includes 191,292 shares of Common Stock held of record by JAMAL Enterprises, LP, for which Mr. Mitchell has sole voting and investment power. Also includes 1,233 shares of Common Stock issuable to Mr. Mitchell upon the vesting of restricted stock units. |
(8) | Includes 6,327 vested restricted stock units, delivery of which has been deferred pursuant to the award agreement, and 1,233 shares of Common Stock issuable to Dr. Ohnimus upon the vesting of restricted stock units. Dr. Ohnimus has pledged 43,209 shares of Common Stock. |
(9) | Includes 1,233 shares of Common Stock issuable to Mr. Sepulveda upon the vesting of restricted stock units. |
(10) | Includes 1,233 shares of Common Stock issuable to Ms. Shannon upon the vesting of restricted stock units. |
(11) | Includes 45,595 shares of Common Stock issuable to Mr. Singleton upon the exercise of stock options. Also includes 38,917 shares of restricted stock. Pursuant to the terms of the restricted stock grants, Mr. Singleton has the right to vote such shares but may only dispose of such shares to the extent they have vested. |
(12) | Includes 3,965 shares of Common Stock held by the Individual Retirement Account of Mr. Stephenson. |
(13) | Includes 4,800,000 shares of Common Stock held by HEYCO Energy Group, Inc. (“HEGI”), 166,667 of which are being held in an escrow account pursuant to the HEYCO Merger and related escrow agreement. As Chairman and Chief Executive Officer of HEGI, Mr. Yates will have ultimate voting and dispositive power with respect to all shares held by HEGI. Also includes 2,500 shares of Common Stock owned by Spiral, Inc., an entity owned by certain trusts of which Mr. Yates is the sole trustee and with respect to which Mr. Yates has voting and dispositive power. Also includes 300 shares of Common Stock issuable to Mr. Yates upon the vesting of restricted stock units. |
(14) | Mr. Burkert is a nominee for director at the Annual Meeting. Includes 34,742 shares held by the Individual Retirement Account of Mr. Burkert. |
(15) | Includes an aggregate of 684,600 shares of Common Stock which our executive officers as a group have the right to acquire within 60 days of April 26, 2016 upon the exercise of stock options. Also includes 442,067 shares of restricted stock held by our executive officers. Pursuant to the terms of the restricted stock grants, the executive officers have the right to vote such shares but may only dispose of such shares to the extent they have vested. Also includes 13,092 shares of Common Stock issuable to directors upon the vesting and delivery of restricted stock units. Includes 140,609 shares of Common Stock pledged by our executive officers and directors. |
(16) | Information based solely on a Schedule 13G/A filed with the SEC on February 10, 2016. The Schedule 13G/A reports that T. Rowe Price Associates, Inc. (“Price Associates”) beneficially owns 9,180,717 shares, has sole voting power with respect to 2,294,732 shares and has sole dispositive power with respect to 9,180,717 shares. According to the Schedule 13G/A, these securities are owned by various individual and institutional investors, for which Price Associates serves as an investment adviser registered under the Investment Advisers Act of 1940, as amended, with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, as amended, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. According to the Schedule 13G/A, Price Associates’ address is 100 E. Pratt Street, Baltimore, MD 21202. |
(17) | Information based solely on a Schedule 13G/A filed with the SEC on February 10, 2016. The Schedule 13G/A reports that The VanGuard Group (“VanGuard”) beneficially owns 5,225,110 shares, has sole voting power with respect to 135,848 shares, has shared voting power with respect to 4,700 shares, has sole dispositive power with respect to 5,089,162 shares and has shared dispositive power with respect to 135,948 shares. According to the Schedule 13G/A, VanGuard’s address is 100 Vanguard Blvd, Malvern, PA 19355. |
(18) | Information based solely on a Schedule 13G filed with the SEC on January 28, 2016. The Schedule 13G reports that BlackRock, Inc. (“BlackRock”) beneficially owns 4,423,718 shares, has sole voting power with respect to 4,258,551 shares and has sole dispositive power with respect to 4,423,718 shares. According to the Schedule 13G, BlackRock’s address is 55 East 52nd Street, New York, NY 10055.
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16, 2024.
| | | | | | | | | | Name | Amount and Nature of Ownership of Common Stock | Percent of Class | | Directors, Nominees and Named Executive Officers | | | Joseph Wm. Foran(1) | 5,345,726 | 4.3% | Craig N. Adams(2) | 332,056 | * | Shelley F. Appel(3) | 1,731,965 | 1.4% | Reynald A. Baribault(4) | 138,113 | * | R. Gaines Baty(5) | 64,584 | * | William M. Byerley(6) | 49,199 | * | Monika U. Ehrman(7) | 33,249 | * | Julia P. Forrester Rogers(8) | 66,493 | * | Michael D. Frenzel(9) | 66,932 | * | Billy E. Goodwin(10) | 322,324 | * | James M. Howard(11) | 122,835 | * | Timothy E. Parker(12) | 79,257 | * | Van H. Singleton, II(13) | 271,121 | * | Kenneth L. Stewart(14) | 83,893 | * | Susan M. Ward(15) | 1,311 | * | Brian J. Willey(16) | 90,542 | * | All Directors, Nominees and Executive Officers as a Group (19 persons)(17) | 7,575,492 | 6.1% | | Other 5% Owners | | | BlackRock, Inc.(18) | 14,266,998 | 11.4% | The Vanguard Group(19) | 11,020,992 | 8.8% |
* Less than one percent (1%) (1)Includes (i) 1,105,913 shares of Common Stock held of record by Sage Resources, Ltd., a limited partnership owned by the Foran family, including Mr. Foran; (ii) 43,995 shares of Common Stock held of record by each of the JWF 2022-2 GRAT and the NNF 2022-2 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (iii) 70,528 shares of Common Stock held of record by each of the JWF 2023-1 GRAT and the NNF 2023-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (iv) 83,137 shares of Common Stock held of record by each of the JWF 2023-2 GRAT and the NNF 2023-2 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (v) 198,400 shares of Common Stock held of record by each of the JWF 2024-1 GRAT and the NNF 2024-1 GRAT, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (vi) 446,915 shares of Common Stock held of record by the Foran 2012 Security Trust, for which Mr. Foran is the trustee and over which Mr. Foran has sole voting and investment power; (vii) 482,659 shares of Common Stock held of record by the Foran 2012 Savings Trust, for which Mr. Foran’s spouse is a trustee; and (viii) 1,137,182 shares of Common Stock held of record, collectively, by the LRF 2011 Non-GST Trust, WJF 2011 Non-GST Trust, JNF 2011 Non-GST Trust, SIF 2011 Non-GST Trust and MCF 2011 Non-GST Trust (collectively, the “2011 Non-GST Trusts”), for which trusts Mr. Foran and his spouse, as settlors of each of the 2011 Non-GST Trusts, retain the power of substitution with respect to the property of the 2011 Non-GST Trusts; and (ix) 1,347,912 shares of Common Stock held of record, collectively, by the LRF 2020 Non-GST Trust, WJF 2020 Non-GST Trust, SIF 2020 Non-GST Trust and MCF 2020 Non-GST Trust (collectively, the “2020 Non-GST Trusts”), for which trusts Mr. Foran and his spouse, as settlors of each of the 2020 Non-GST Trusts, retain the power of substitution with respect to the property of the 2020 Non-GST Trusts. (2)Includes 2,850 shares of Common Stock held of record by the 401(k) account of Mr. Adams. Information based solely on a Form 4 filed with the SEC on January 2, 2024. Mr. Adams retired from his roles as the Executive Vice President, Co-Chief Operating Officer and Corporate Secretary of the Company on March 6, 2024, at which time Mr. Adams was no longer an executive officer of the Company. 89Matador Resources Company | 2024 Proxy Statement
(3)Includes (i) 1,105,913 shares of Common Stock held of record by Sage Resources, Ltd., a limited partnership owned by the Foran family, including Ms. Appel; (ii) 227,416 shares of Common Stock held of record by the SIF 2011 Non-GST Trust; (iii) 336,978 shares of Common Stock held of record by the SIF 2020 Non-GST Trust; (iv) 4,742 shares of Common Stock held of record by the Individual Retirement Account of Ms. Appel; (v) 2,150 shares of Common Stock held of record by the 401(k) account of Ms. Appel; (vi) 58 shares of Common Stock held of record by the Health Savings Account of Ms. Appel’s spouse; and (vii) 2,621shares of Common Stock issuable to Ms. Appel upon the vesting of RSUs. (4)Includes 6,515 shares of Common Stock held of record by the Individual Retirement Account of Mr. Baribault. Also includes 113,197 shares of Common Stock held of record by the Reynald A. Baribault Maritalized Revocable Living Trust and 7,518 shares of Common Stock held of record by the Sally K. Baribault Maritalized Revocable Living Trust, for which trusts both Mr. Baribault and his spouse are trustees and share voting and investment power. Also includes 10,883 shares of Common Stock issuable to Mr. Baribault upon the vesting and delivery of RSUs (5)Includes 16,966 shares of Common Stock issuable to Mr. Baty upon the vesting and delivery of RSUs. (6)Includes 25,361 shares of Common Stock issuable to Mr. Byerley upon the vesting and delivery of RSUs. (7)Includes 2,621 shares of Common Stock issuable to Ms. Ehrman upon the vesting of RSUs. (8)Includes 19,785 shares of Common Stock held of record by the Individual Retirement Account of Ms. Rogers and 5,800 shares of Common Stock held of record by Ms. Rogers’ spouse. Also includes 2,621 shares of Common Stock issuable to Ms. Rogers upon the vesting of RSUs. Ms. Rogers’ term as a director will expire at the 2024 Annual Meeting. (9)Information based solely on a Form 4 filing with the SEC on May 3, 2022. Mr. Frenzel served as the Company’s principal financial officer from March 31, 2022 to February 16, 2023. (10)Includes 5,000 shares of Common Stock held of record by the 401(k) account of Mr. Goodwin. Information based solely on a Form 4 filed with the SEC on January 2, 2024. Mr. Goodwin retired from his role as the President—Operations of the Company on April 10, 2024, at which time Mr. Goodwin was no longer an executive officer of the Company. (11)Includes 50,000 shares of Common Stock held of record by the Individual Retirement Account of Mr. Howard and 50,000 shares of Common Stock held by PBH Family Partners, Ltd., a family limited partnership owned by Mr. Howard’s family, including Mr. Howard, and over which Mr. Howard and his spouse share voting and investment authority. Also includes 12,835 shares of Common Stock issuable to Mr. Howard upon the vesting and delivery of RSUs. (12)Includes 2,621 shares of Common Stock issuable to Mr. Parker upon the vesting of RSUs. (13)Includes 2,505 shares of Common Stock held of record by the 401(k) account of Mr. Singleton. (14)Includes 15,153 shares of Common Stock issuable to Mr. Stewart upon the vesting and delivery of RSUs. (15)Includes 1,311 shares of Common Stock issuable to Ms. Ward upon the vesting and delivery of RSUs. (16)Includes 3,760 shares of Common Stock held of record by the Individual Retirement Account of Mr. Willey. Also Includes 13,381 shares of restricted stock. Pursuant to the terms of Mr. Willey's restricted stock grants, Mr. Willey has the right to vote such shares but may only dispose of such shares to the extent they have vested. (17)Includes 36,762 shares of restricted stock held by our executive officers. Pursuant to the terms of such restricted stock grants, the executive officers have the right to vote such shares but may only dispose of such shares to the extent they have vested. Also includes 92,993 shares of Common Stock issuable to directors upon the vesting and delivery of RSUs. (18)Information based solely on a Schedule 13G/A filed with the SEC on January 23, 2024. The Schedule 13G/A reports that BlackRock, Inc. (“BlackRock”) beneficially owns 14,266,998 shares of Common Stock, has sole voting power with respect to 13,937,390 shares of Common Stock and has sole dispositive power with respect to 14,266,998 shares of Common Stock. According to the Schedule 13G/A, BlackRock’s address is 50 Hudson Yards, New York, NY 10001. (19)Information based solely on a Schedule 13G/A filed with the SEC on February 13, 2024. The Schedule 13G/A reports that The Vanguard Group (“Vanguard”) beneficially owns 11,020,992 shares of Common Stock, has shared voting power with respect to 117,264 shares of Common Stock, has sole dispositive power with respect to 10,797,714 shares of Common Stock and has shared dispositive power with respect to 223,278 shares of Common Stock. According to the Schedule 13G/A, Vanguard’s address is 100 Vanguard Blvd, Malvern, PA 19355.
90Matador Resources Company | 2024 Proxy Statement
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Exchange Act requires the Company’sour directors, executive officers directors and persons who beneficially own more than ten percent10% of the Company’soutstanding shares of our Common Stock to file initialwith the SEC reports ofregarding their stock ownership and changes in ownership with the SEC.Additionally, SEC regulations require that the Company identify any individuals for whom one of the referenced reports was not filed on a timely basis during the most recent fiscal year. to their ownership.
Based solely on the Company’sa review of the copies of thesuch reports receivedfurnished to us and written inquiries to the Company’srepresentations of our directors and executive officers, the Company believeswe believe that all persons subject tosuch Section 16(a) filing requirements were timely met during the year ended December 31, 2023, except that one of the Exchange Actour directors, Reynald A. Baribault, did not timely filed all reports required pursuant to such sectionfile a Form 4 relating to the Company’sthree transactions in which shares of Common Stock were purchased by Mr. Baribault’s broker as a dividend reinvestment on September 1, 2023. Mr. Baribault discovered such transactions had occurred without his knowledge and the transactions were ultimately reported in 2015.a Form 5 filed on February 8, 2024.
Shareholder Proposals for the 20172025 Proxy Statement
For shareholder proposals to be included in the Company’s Proxy Statementproxy statement and form of proxy relating to the 20172025 Annual Meeting, of Shareholders, such proposals must be received by the Company at its offices in Dallas, Texas, addressed to the Corporate Secretary of the Company, no later than December 29, 2016.27, 2024. If the Company changes the date of the 2025 Annual Meeting by more than 30 days from the anniversary of the 2024 Annual Meeting, shareholder proposals must be received a reasonable time before the Company begins to print and mail the proxy materials for the 2025 Annual Meeting in order to be considered for inclusion in the Company’s proxy statement. Upon timely receipt of any such proposal, the Company will determine whether or not to include such proposal in the proxy statement and proxy in accordance with applicable regulations and provisions governing the solicitation of proxies. In addition, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice to the Company that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than April 14, 2025.
Director Nominations or Other Business for Presentation at the 20172025 Annual Meeting Under the Amended and Restated Bylaws of the Company, certain procedures are provided that a shareholder must follow in order
Alternatively, shareholders intending to place in nomination persons for election as directors at an Annual Meetingannual meeting of Shareholdersshareholders or to introduce an item of business at an Annual Meetingannual meeting of Shareholders.shareholders without having the nomination or proposal included in the Company’s proxy statement must comply with certain procedures set forth in the Bylaws. These procedures provide, generally, among other things, that shareholders desiring to place in nomination persons for election as directors, and/or bring a proper subject of business before an Annual Meeting,annual meeting, must do so by a written notice timely received (on or before March 14, 2017,12, 2025, but no earlier than February 12, 2017,10, 2025, for the 20172025 Annual Meeting) to the Corporate Secretary of the Company containing the name and address of the shareholder and the number of shares of the Company’s Common Stock beneficially owned by the shareholder. If the notice relates to a nomination for director, it must also set forth the name, age, business and residence addresses of the candidate, the candidate’s résumé or a listing of his or her qualifications to be a director of the Company, the person’s written consent to be a director if selected by the Nominating Compensation and Planning Committee, nominated by the Board and elected by the shareholders and any other information that would be required to be disclosed in solicitations of proxies for the election of directors. The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as director. Notice of an item of business shall include a brief description of the proposed business and any material interest of the shareholder in such business.
The Chairman of the meeting may refuse to allow the transaction of any business not presented, or to acknowledge the nomination of any person not made, in compliance with the foregoing procedures. Copies of the Company’s Amended and Restated Bylaws as amended to date, are available from the Corporate Secretary of the Company.Company and on the Company’s website at www.matadorresources.com under the heading “Investor Relations—Corporate Governance.”
See “Corporate Governance — Governance—Board Committees — Committees—Nominating Compensation and Planning Committee” for the process for shareholders to follow to suggest a director candidate to the Nominating Compensation and Planning Committee for nomination by the Board.
91Matador Resources Company | 2024 Proxy Statement
Annual Report on Form 10-K
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2023, as filed with the SEC, including financial statements, accompaniesis being made available to our shareholders concurrently with this Proxy Statement at www.proxyvote.com and does not form part of the proxy statement.solicitation material. Shareholders may obtain without charge another copy of the Annual Report on Form 10-K, excluding certain exhibits, by writing to Investor Relations, Matador Resources Company, One Lincoln Centre, 5400 LBJ Freeway, Suite 1500, Dallas, Texas 75240.
92Matador Resources Company | 2024 Proxy Statement
Management of the Company is not aware of other business to be presented for action at the Annual Meeting; however, if other matters are presented for action, it is the intention of the persons named in the accompanying form of proxy to vote in accordance with their judgment on such matters. |
By Order of the Board of Directors, | |
| Joseph Wm. Foran
| Chairman and Chief Executive Officer
|
April 28, 2016
Appendix A
MATADOR RESOURCES COMPANY
AMENDED AND RESTATED ANNUAL INCENTIVE PLAN
FOR
MANAGEMENT AND KEY EMPLOYEES
(effective as of January 1, 2016)
ARTICLE 1
PURPOSE
The Plan is intended to provide the Company, and any successor thereto, a means by which it can engender and sustain a sense of personal commitment on the part of its executives, select managers and key employees in the continued growth, development and financial success of the Board of Directors,
Joseph Wm. Foran Chairman and Chief Executive Officer
April 26, 2024
93Matador Resources Company and encourage them to remain with and devote their best efforts to the business of the Company, thereby advancing the interests of the Company and its shareholders. The Company may award to such employees annual incentive compensation, which is tied to the achievement of pre-established and objective performance goals, based on the terms and conditions established herein.The Plan is intended to provide Participants (as hereinafter defined) with incentive compensation which is not subject to the deduction limitation rules prescribed under Section 162(m) of the Code, and should be construed to the extent possible as providing for remuneration which is “performance-based compensation” within the meaning of Code Section 162(m) and the treasury regulations promulgated thereunder.
ARTICLE 2
DEFINITIONS
For the purposes of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:
2.1 “|
2024 Proxy Statement
ANNEX A ANNEX A
Non-GAAP Financial Measures
Adjusted EBITDA” means
We define, on a consolidated basis and for San Mateo, Adjusted EBITDA as earnings before interest expenses,expense, income taxes, depletion, depreciation and amortization, accretion of asset-retirementasset retirement obligations, property impairments, unrealized derivative gains and losses, non-recurring transaction costs for certain acquisitions, non-recurring transaction costs for certain acquisitions, certain other non-cash items and non-cash stock-based compensation expensesexpense and net gain or loss on asset sales and inventory impairments,impairment. Adjusted EBITDA is not a measure of net income (loss) or cash flows as determined by GAAP. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. All references to Matador’s Adjusted EBITDA are those values attributable to Matador Resources Company shareholders after giving effect to Adjusted EBITDA attributable to third-party non-controlling interests, including in San Mateo.
Management believes Adjusted EBITDA is necessary because it allows us to evaluate our operating performance and compare the results of operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in calculating Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which certain assets were acquired.
Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss) or net cash provided by operating activities as determined in accordance with GAAP or as a primary indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components of understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure. Our Adjusted EBITDA may not be comparable to similarly titled measures of another company because all companies may not calculate Adjusted EBITDA in the same manner.
The following table presents our calculation of Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the GAAP financial measures of net income and net cash provided by operating activities, respectively:
94Matador Resources Company and its Subsidiaries, determined| 2024 Proxy Statement
Adjusted EBITDA—Matador Resources Company
| | | | | | | Year Ended | | December 31, 2023 | | (In Thousands) | | | Unaudited Adjusted EBITDA Reconciliation to Net Income: | | | Net income attributable to Matador Resources Company shareholders | $ | 846,074 | | | Net income attributable to non-controlling interest in subsidiaries | 64,285 | | | Net income | 910,359 | | | Interest expense | 121,520 | | | Total income tax provision | 186,026 | | | Depletion, depreciation and amortization | 716,688 | | | Accretion of asset retirement obligations | 3,943 | | | Unrealized loss on derivatives | 1,261 | | | Non-cash stock-based compensation expense | 13,661 | | | Net loss on impairment | 202 | | | Income related to contingent consideration and other | (6,038) | | | Consolidated Adjusted EBITDA | 1,947,622 | | | Adjusted EBITDA attributable to non-controlling interest in subsidiaries | (98,075) | | | Adjusted EBITDA attributable to Matador Resources Company shareholders | $ | 1,849,547 | |
| | | | | | | Year Ended | | December 31, 2023 | | (In Thousands) | | | Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities: | | | Net cash provided by operating activities | $ | 1,867,828 | | | Net change in operating assets and liabilities | (50,027) | | | Interest expense, net of non-cash portion | 114,473 | | | Current income tax provision | 13,922 | | | Other non-cash and non-recurring expense | 1,426 | | | Adjusted EBITDA attributable to non-controlling interest in subsidiaries | (98,075) | | | Adjusted EBITDA attributable to Matador Resources Company shareholders | $ | 1,849,547 | |
Adjusted EBITDA - San Mateo (100%)
| | | | | | | Year Ended | | December 31, 2023 | | (In Thousands) | | | Unaudited Adjusted EBITDA Reconciliation to Net Income: | | | Net income | $ | 131,196 | | | Depletion, depreciation and amortization | 35,132 | | | Interest expense | 33,489 | | | Accretion of asset retirement obligations | 336 | | | | | Adjusted EBITDA | $ | 200,153 | |
95Matador Resources Company | 2024 Proxy Statement
| | | | | | | Year Ended | | December 31, 2023 | | (In Thousands) | | | Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities: | | | Net cash provided by operating activities | $ | 152,907 | | | Net change in operating assets and liabilities | 14,771 | | | Interest expense, net of non-cash portion | 32,475 | | | Adjusted EBITDA | $ | 200,153 | |
ANNEXAdjusted Free Cash Flow
Adjusted free cash flow is measured, on a consolidated income basis.2.2 “Affiliate” shall have the meaning set forth in Rule12b-2 promulgated under Section 12 of the Securities Exchange Act of 1934, as amended.
2.3 “Award” means a grant of Incentive Compensation by the Committee that may be paid to a Participant upon the satisfaction of a specified Performance Goalbasis for a particular Performance Period, pursuant to such terms, conditions, restrictions and limitations established by the Committee and the Plan.
2.4 “Board” means the Board of Directors of the Company.
2.5 “Cause” means (i) Participant’s continued and material failure to perform the duties of his employment consistent with Participant’s position, except as a result of being Partially Disabled (during any period of Partial Disability) or Totally Disabled, (ii) if Participant is a party to an employment agreement or independent
contractor agreement, Participant’s failure to perform his material obligations under such agreement, except as a result of being Partially Disabled (during any period of Partial Disability) or Totally Disabled, or a material breach by the Participant of Company’s written policies concerning discrimination, harassment or securities trading, (iii) Participant’s refusal or failure to follow lawful directives of the Board, the Chairman of the Board and/or Chief Executive Officer, except as a result of being Partially Disabled (during any period of Partial Disability) or Totally Disabled, (iv) Participant’s commission of an act of fraud, theft, or embezzlement, (v) Participant’s indictment for or conviction of a felony or other crime involving moral turpitude, or (vi) Participant’s intentional breach of fiduciary duty;provided,however, that Participant shall have thirty (30) days after written notice from the Board (or the Committee) to remedy any actions alleged under subsections (i), (ii) or (iii) in the manner reasonably specified by the Board (or the Committee).
2.6 (a) “Change in Control” means a change in the Company’s ownership, its effective control or the ownership of a substantial portion of its assets, as follows:
(i)Change in Ownership. A change in ownership of the Company, occurs onas net cash provided by operating activities, adjusted for changes in working capital and cash performance incentives that are not included as operating cash flows, less cash flows used for capital expenditures, adjusted for changes in capital accruals. On a consolidated basis, these numbers are also adjusted for the datecash flows related to non-controlling interest in subsidiaries that any Person, otherrepresent cash flows not attributable to Matador shareholders. Adjusted free cash flow should not be considered an alternative to, or more meaningful than, (i) the Companynet cash provided by operating activities as determined in accordance with GAAP or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding stock pursuant to an offering of such stock or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownershipindicator of the Company’s stock, acquires ownershipliquidity. Adjusted free cash flow is used by the Company, securities analysts and investors as an indicator of the Company’s stock that, together with stock heldability to manage its operating cash flow, internally fund its D/C/E capital expenditures, pay dividends and service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. Additionally, this non-GAAP financial measure may be different than similar measures used by such Person, constitutes more than 50%other companies. The Company believes the presentation of the total fair market value or total voting poweradjusted free cash flow provides useful information to investors, as it provides them an additional relevant comparison of the Company’s stock. However, if any Person is considered to own already more than 50%performance, sources and uses of the total fair market value or total voting power of the Company’s stock, the acquisition of additional stock by the same Person is not considered to be a Change in Control. In addition, if any Person has effective control of the Company through ownership of 30% or more of the total voting power of the Company’s stock, as discussed in paragraph (ii) below, the acquisition of additional control of the Company by the same Person is not considered to cause a Change in Control pursuant to thisparagraph (i); or
(ii)Change in Effective Control. Even though the Company may not have undergone a change in ownership underparagraph (i) above, a change in the effective control of the Company occurs on either of the following dates:
(A) the date that any Person acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person) ownership of the Company’s stock possessing 30% or more of the total voting power of the Company’s stock. However, if any Person owns 30% or more of the total voting power of the Company’s stock, the acquisition of additional control of the Company by the same Person is not considered to cause a Change in Control pursuant to thissubparagraph (ii)(A); or
(B) the date during any 12-month period when a majority of members of the Board is replaced by directors whose appointment or election is not endorsed by a majority of the Board before the date of the appointment or election;provided,however, that any such director shall not be considered to be endorsed by the Board if his or her initial assumption of office occurs as a result of an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii)Change in Ownership of Substantial Portion of Assets. A change in the ownership of a substantial portion of the Company’s assets occurs on the date that a Person acquires (or has acquired during the12-month period ending on the date of the most recent acquisition by such Person) assets of the Company, that have a total gross fair market value equal to at least 40% of the total gross fair market value of all of the Company’s assets immediately before such acquisition or acquisitions. However, there is no Change in Control when there is such a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, through a transfer to (i) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock; (ii) an entity, at least 50% of the total value or voting power of the stock of which is owned, directly or indirectly, by the Company; (iii) a Person that owns, directly or indirectly, at least 50% of the total value or voting power of the Company’s
outstanding stock; or (iv) an entity, at least 50% of the total value or voting power of the stock of which is owned by a Person that owns, directly or indirectly, at least 50% of the total value or voting power of the Company’s outstanding stock.
(b) The provisions of thisSection 2.6 shall be interpreted in accordance with the requirements of Code Section 409A, it being the intent of the parties that, to the extent necessary to comply with Code Section 409A, an event shall not constitute a “Change in Control” for purposes of the Plan, unless such event also constitutes a change in the Company’s ownership, its effective control or the ownership of a substantial portion of its assets within the meaning of Code Section 409A.
2.7 “Claim” shall have the meaning set forth inSection 7.5.
2.8 “Code” means the Internal Revenue Code of 1986, as amended, together with the published rulings, regulations and interpretations duly promulgated thereunder.
2.9 “Committee” means the “Nominating, Compensation and Planning Committee” of the Board or any other committee as determined by the Board, which shall consist of two or more “outside directors” within the meaning of Code Section 162(m).
2.10 “Company” means Matador Resources Company, a Texas corporation, and any successor entity.
2.11 “Covered Employee” shall have the same meaning as the term “covered employee” (or its counterpart, as such term may be changed from time to time) contained in the treasury regulations promulgated under Code Section 162(m), or their respective successor provision or provisions, that being an employee for whom the limitation on deductibility for compensation pursuant to Code Section 162(m) is applicable.
2.12 “Employee” means a common law employee (as defined in accordance with the Regulations and Revenue Rulings then applicable under Section 3401(c) of the Code) of the Company and any Subsidiary of the Company.
2.13 “Fiscal Year” means the fiscal year of the Company.
2.14 “Incentive Compensation” means the compensation approved by the Committee to be paid to a Participant for any Performance Period under the Plan.
2.15 “Maximum Achievement” means, for a Participant for any Performance Period, the maximum level of achievement of a set of Performance Goals required for Incentive Compensation to be paid at the maximum bonus level, which may be established by the Committee in accordance withSection 5.2 below.
2.16 “Participant” means an Employee who satisfies the eligibility requirements ofArticle 4 of the Plan and who is selected by the Committee to participate in the Plan for any Performance Period.
2.17 “Partially Disabled” means the inability because of any physical or emotional illness lasting no more than 90 days to perform his assigned duties under his employment agreement or independent contractor agreement, or if the Participant is not a party to any such agreement, to perform his assigned duties for no less than 20 hours per week (and including any period of short term total absence due to illness or injury, including recovery from surgery, but in no event lasting more than the 90-day period of Partial Disability).
2.18 “Performance Goals” means, as applicable, the performance goal set forth inSection 5.1, the objectives established by the Committee based on the factors set forth inSection 5.3 for the Performance Period pursuant toSection 5.2 hereof, and other performance metrics or conditions established by the Committee in accordance withSection 5.6 for the purpose of determining Awards under the Plan.
2.19 “Performance Period” means the consecutive 12 month period that constitutes the Company’s fiscal year.
2.20 “Performance Pool” shall have the meaning set forth inSection 5.1.
2.21 “Person” shall have the meaning given in Section 7701(a)(1) of the Code. Person shall include more than one Person acting as a group as defined by the Final Treasury Regulations issued under Section 409A.
2.22 “Plan” means this Matador Resources Company Amended and Restated Annual Incentive Plan for Management and Key Employees, as set forth herein and as amended from time to time.
2.23 “Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
2.24 “Subsidiary” means (i) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (ii) any limited partnership, if the Company or any corporation described in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner and (iii) any partnership or limited liability company, if the partners or members thereof are composed only of the Company, any corporation listed in item (i) above or any limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such corporations, limited partnerships, partnerships or limited liability companies.
2.25 “Termination of Service” occurs when a Participant who is an Employee has a “separation from service” as defined in Section 1.409A-1(h) of the Final Treasury Regulations under Section 409A, or any successor provision thereto, for any reason.
2.26 “Target Achievement” means, for a Participant for any Performance Period, the level of achievement of a set of Performance Goals required for Incentive Compensation to be paid at the target bonus level, which may be established by the Committee in accordance withSection 5.2 below.
2.27 “Threshold Achievement” means, for a Participant for any Performance Period, the minimum level of achievement of a set of Performance Goals required for any Incentive Compensation to be paid at the threshold bonus level, which may be established by the Committee in accordance withSection 5.2 below.
2.28 “Totally Disabled” or “Total Disability” means in and for the period necessary to qualify for benefits under any disability income insurance policy and any replacement policy or policies covering Participant and Participant has been declared to be Totally Disabled by the insurer.
ARTICLE 3
ADMINISTRATION
Subject to the terms of thisArticle 3, the Plan shall be administered by the Committee. The Committee shall consist of not fewer than two persons. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board, and any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. The Committee shall select one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee.
The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of the Plan, (iii) make such other determinations and take such other action as it deems necessary or advisable in the administration of the Plan, (iv) supply any omissions herein, and reconcile and correct any errors or inconsistencies, (v) decide any questions in the administration and application of the Plan, (vi) make equitable adjustments for any mistakes or errors made in the administration of the Plan, (vi) maintain complete and accurate records of all Plan transactions and other data in the manner necessary for proper administration of the Plan, (vii) enforce the terms of the Plan and the rules and regulations adopted thereunder, (viii) review claims and render decisions on claims for benefits under the Plan, (ix) furnish the Company or the Participants, upon request, with information that they require for tax or other purposes, (x) employ agents, attorneys, accountants or other persons (who may be employed by or represent the Company) for such purposes as the Committee considers necessary or desirable in connectioncapital associated with its duties hereunderoperations across periods and (xi) perform any and all other acts necessary or appropriate for the proper management and administration of the Plan. All such actions or determinations made by the Committee, and the application of rules and regulations to a particular case or issue by the Committee, in good faith, shall not be subject to review by anyone, but shall be final, binding and conclusive on all interested parties.
For each Performance Period, the Committee shall have full authority to (i) designate the Employees who shall participate in the Plan, (ii) establish the Performance Goals and achievement levels for each Participant pursuant toArticle 5 hereof and (iii) establish and certify the achievement of the Performance Goals. Notwithstanding any provision of the Plan to the contrary, any decision concerning the awarding of Incentive Compensation hereunder (including, without limitation, establishment of Performance Goals, Threshold Achievement, Target Achievement, Maximum Achievement, and any other information necessary to calculate Incentive Compensation for a Covered Employee for such Performance Period) shall be made exclusively by the members of the Committee who are at that time “outside directors,” as that term is used in Code Section 162(m) and the treasury regulations promulgated thereunder.
With respect to restrictions in the Plan that are based on the requirements of Code Section 162(m), Code Section 409A, or any other applicable law, rule or restriction (collectively, “applicable law”), to the extent that any such restrictions are no longer required by applicable law, the Committee shall have the sole discretion and authority to make Awards hereunder that are no longer subject to such restrictions.
ARTICLE 4
ELIGIBILITY
Any Employee (including an Employee who is also a director or an officer) is eligible to participate in the Plan. For each Performance Period, the Committee shall select the particular Employees to whom an Award may be awarded for such Performance Period, which determination shall be made within the first ninety (90) days of such Performance Period (and in the case of a Performance Period less than a Fiscal Year, such determination shall be made no later than the date that 25% of the Performance Period has elapsed). Awards may be made by the Committee at any time and from time to time during a Performance Period to new Participants, or to then Participants, and may include or exclude previous Participants, as the Committee shall determine. The Committee’s determinations under the Plan (including without limitation determinations of which Employees, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) may be made by the Committee selectively among Employees who receive, or are eligible to receive, Awards under the Plan. To the extent permitted by the Committee, Employees who participate in the Plan may also participate in other incentive or benefit plans of the Company or any Subsidiary.
ARTICLE 5
PERFORMANCE POOL AND PERFORMANCE GOALS
5.1Financial Formula For Funding Maximum Pool of Awards; Limitation on Total Incentive Compensation. The financial formula that will fund the maximum pool of Awards for all Participants in a Performance Period (each, a “Performance Pool”) shall bethree and one-half percent (3.5%) of Adjusted EBITDA for such Performance Period;provided that, Adjusted EBITDA equals or exceeds fifty million dollars ($50,000,000) for such Performance Period. Once the Performance Pool is calculated as set forth above, the Awards will be allocated to each Participant based on the achievement of the established Performance Goal for such Performance Period, with the maximum amount of each Award for each Participant as set forth in the table below. The table below establishes the maximum Award payable to any Participant for a specified Performance Period.
| | | Participant
| | Percentage of Performance Pool (Maximum)
| Chief Executive Officer
| | Thirty Percent (30%) | Second Highest Paid Participant
| | Seventeen and One-Half Percent (17.5%) | Third Highest Paid Participant
| | Seventeen and One-Half Percent (17.5%) | Fourth Highest Paid Participant
| | Seventeen and One-Half Percent (17.5%) | Fifth Highest Paid Participant
| | Seventeen and One-Half Percent (17.5%) | Total
| | One Hundred Percent (100%) |
To determine the actual amount of an Award payable to a Participant for any Performance Period, the Committee may exercise its discretion to adjust the Awards downward in accordance withSection 5.6 below.
5.2Performance Goals Establishment. Performance Goals in addition to the Performance Goal set forth inSection 5.1 may be established by the Committee for each Performance Period;provided,however, the Committee must establish such additional Performance Goals to the extent the Committee determines that it is necessary to comply with Code Section 162(m). The Performance Goals may be identical for all Participants or, at the discretion of the Committee, may be different to reflect more appropriate measures of individual performance. No later than the ninetieth (90th) day of the Performance Period (and in the case of a Performance Period less than a Fiscal Year, such determination shall be made no later than the date that 25% of the Performance Period has elapsed), the Committee shall approve, as applicable, the following: (i) the Performance Goals for the Performance Period, (ii) the Threshold Achievement, Target Achievement, and Maximum Achievement levels for the Performance Goals for the Performance Period (if applicable), (iii) with respect to each Participant, Incentive Compensation for achievement of Threshold Achievement, Target Achievement, and Maximum Achievement levels and the relative weighting, if any, of each Performance Goal in determining the Participant’s Incentive Compensation (if applicable) and (iv) a schedule setting forth the payout opportunity for Threshold Achievement, Target Achievement and Maximum Achievement levels (if applicable).
5.3Performance Goals. The Performance Goals, if any, established by the Committee for any Performance Period shall relate to the achievement of predetermined financial and operating objectives for the Company and its Subsidiaries, which, where applicable, shall be within the meaning of Code Section 162(m) and consist of one or more of any combination of the factors set forth below. In establishing the Performance Goals for the Performance Period, the Committee in its discretion may include one or any combination of the following criteria in either absolute or relative terms (as compared to an external benchmark or performance of a designated peer group of companies), for either the Company or any of its Subsidiary organizations:
(a) Earnings (either in aggregate or on a per-share basis) or adjusted earnings;
(b) Net income or adjusted net income;
(c) Operating income;
(d) Operating profit;
(e) Cash flow;
(f) Return measures (including return on assets, investments, equity or invested capital);
(g) Total shareholder return (change in share price plus reinvestment of dividends into shares when declared, if any, from period to period) and other measures of shareholder return (including income applicable to common shareholders or other class of shareholders);
(h) Earnings before or after either, or any combination of, interest, taxes, depletion, depreciation, amortization or other non-cash items;
(i) Adjusted EBITDA;
(j) Acreage;
(k) Reserves, total reserves, reserves per barrel;
(l) Present value of estimated future oil and gas revenues, net of estimated direct expenses, discounted at an annual discount rate of 10% (or PV 10);
(m) Gross revenues;
(n) Reduction in expense levels in each case, where applicable, determined either on a Company-wide basis or in respect of any one or more Subsidiaries or business units thereof;
(o) Economic value or economic value added;
(p) Market share or market share added;
(q) Annual net income to common stock;
(r) Earnings per share or growth in earnings per share;
(s) Annual cash flow provided by operations;
(t) Changes in annual revenues;
(u) Strategic and operational business criteria, consisting of one or more objectives based on specified revenue, market penetration, geographic business expansion goals, objectively identified project milestones, production volume levels, cost targets, lease operating expenses, G&A expenses, finding and development costs, reserves or reserves added, reserve replacement ratio and goals relating to acquisitions or divestitures; and/or
(v) Goals relating to specific environmental compliance measures and safety and accident rates.
For the Performance Goals listed above, the Committee may designate whether a particular Performance Goal is to be measured on a pre-tax basis or post-tax basis. In addition, certain Performance Goals may be stated in reference to a production volume of measurement such as in per cubic feet equivalents (e.g., per Mcfe, MMcfe or Bcfe). Any Performance Goal may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Goal may include or exclude (i) extraordinary, unusual and/or non-recurringCompany’s peers. In addition, this non-GAAP financial measure reflects adjustments for items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, (iv) the effect of a merger or acquisition, as identified in the Company’s quarterlycash flows that are often excluded by securities analysts and annual earnings releases or (v) other similar occurrences. In all other respects, the Performance Goals shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles or under a methodology established by the Committee which is consistently applied. Further, the Committee may select any one or more of the Performance Goals applicable to a Participant, and Performance Goals may differ for one Participant to the next.
5.4Adjustments for Extraordinary Items. The Committee shall be authorized to make adjustments in the method of calculating attainment of Performance Goals in recognition of: (i) extraordinary or non-recurring items; (ii) changes in tax laws; (iii) changes in generally accepted accounting principles or changes in accounting
policies; (iv) changes related to restructured or discontinued operations; (v) restatement of prior period financial results; and (vi) any other unusual, non-recurring gain or loss that is separately identified and quantified in the Company’s financial statements. Notwithstanding the foregoing, the Committee may, at its sole discretion, reduce the performance results upon which Awards are based under the Plan to offset any unintended result(s) arising from events not anticipated when the Performance Goals were established.
5.5Certification. Within sixty (60) days immediately following the end of the applicable Performance Period, the Committee shall certify in writing and in compliance with the requirements of Treasury Regulation 1.162-27 (and successor regulations thereto) in the case of any Award intended to qualify under Code Section 162(m): (i) the extent to which the Performance Goals were achieved, if any, for the Performance Period, (ii) the calculation of the Participants’ Incentive Compensation and (iii) the determination by the Committee of the amount of Incentive Compensation, if any, to be paid to each Participant for the Performance Period. In determining whether Performance Goals have been achieved and Incentive Compensation is payable for a given Performance Period, generally accepted accounting principles to the extent applicable to the Performance Goal shall be applied on a basis consistent with prior periods, and such determinations shall be based on the calculations made by the Company and binding on each Participant. Approved minutes of the Committee meeting in which the certification required by thisSection 5.5 is made shall be treated as written certification for purposes for thisSection 5.5.
5.6Discretion to Reduce Incentive Compensation. After the certification described inSection 5.5 the Committee may, in its sole and absolute discretion, decrease the Incentive Compensation to be paid to one or more Participants for such Performance Period. The Committee may consider subjective factors, including factors communicated to the Participant at the beginning of the Performance Period or other factors the Committee considers appropriate, in determining whether to reduce the Incentive Compensation to be paid to a Participant. Notwithstanding anything to the contrary contained herein, the reduction of an Award for any Participant shall not result in the increase in the maximum amount of any Award payable to any Participant underSection 5.1 above.
ARTICLE 6
PAYMENT OF INCENTIVE COMPENSATION
6.1Form and Time of Payment. Except as otherwise provided herein, a Participant’s Award for a Performance Period shall be paid: (a) if the Company’s Fiscal Year is a calendar year, then such Award shall be paid in the calendar year immediately following the close of the year in which such Performance Period ends, but in any event within seventy-five (75) days following the Committee’s certification described inSection 5.5; or (b) if the Company’s Fiscal Year is other than a calendar year, such Awards shall be paid on the one hundred and thirty-fifth (135th) day following the end of such Performance Period. The payment for an Award shall be in the form of a cash lump sum payment.
6.2Forfeiture Upon Termination Prior to End of Performance Period. If a Participant’s employment with the Company and all of its Subsidiaries is terminated voluntarily by the Participant for any reason, or is terminated by his or her employer for any reason during a Performance Period, then such Participant will immediately forfeit any right to receive any Incentive Compensation hereunder for such Performance Period. Under such circumstances where the termination of employment occurs after the Performance Period has ended but prior to the date of actual payment, the Committee shall pay the Participant an amount not to exceed the amount set forth according to the terms of the Award;provided,however, if Participant was terminated for Cause prior to the date of actual payment, then the Participant will not be eligible to receive a payment under the Plan for that Performance Period.
6.3Pro-Rata Payment for Death or Total Disability; New Hires and Promotions.
(a)Death or Disability. If during a Performance Period, a Participant’s employment is terminated by reason of the Participant’s death or Disability, then such Participant (or the Participant’s guardian or personal representative, beneficiary or estate, as applicable) shall, if the Committee so determines, be eligible to receive a pro rata portion of the Incentive Compensation that would have been payable to such Participant, if he or she had remained employed, based on the number of days worked during the Performance Period. Such Incentive Compensation shall be paid at the time and in the manner set forth inSection 6.1 hereof.
(b)New Hires; Promotions. Any individual who is newly-hired or becomes an Employee during a Performance Period and who is selected by the Committee to participate in the Plan shall be eligible to receive a pro rata portion of the Incentive Compensation to which he or she could have been entitled if he or she had been employed for the full Performance Period, based on the number of days during the Performance Period during which he or she is a Participant in the Plan. Such Incentive Compensation shall be paid at the time and in the manner set forth inSection 6.1 hereof.
6.4Recoupment for Restatements. Notwithstanding any other language in this Plan, the Committee may recoup all or any portion of any Incentive Compensation paid to a Participant, in the event of a restatementusers of the Company’s financial statements as set forth in evaluating the Company’s clawback policy, if any, approved by the Company’s Board from timecash spend.
The table below reconciles adjusted free cash flow to time.6.5Change in Control. In the eventits most directly comparable GAAP measure of a Change in Control during a Performance Period, the Company shall make a lump sum payment to each Participant equal to a pro rata amount of any potential Incentive Compensation payable under any Award made to such Participant, calculated by multiplying the amount payable for Target Achievement by the percentage of the Performance Period completed prior to the Change in Control. In the event of such a lump sum payment, no further Incentive Compensation shall be payable under any such Award.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1Non-Assignability. A Participant may not alienate, assign, pledge, encumber, transfer, sell or otherwise dispose of any rights or benefits awarded hereunder prior to the actual receipt thereof; and any attempt to alienate, assign, pledge, sell, transfer or assign prior to such receipt, or any levy, attachment, execution or similar process upon any such rights or benefits shall be null and voidab initio.
7.2No Right To Continue In Employment. Nothing in the Plan confers upon any Employee the right to continue in the employ of the Company or any Subsidiary, or interferes with or restricts in any way the right of the Company and its Subsidiaries to discharge any Employee at any time (subject to any contract rights of such Employee), including, without limitation, before or after the date such Participant is entitled to payment with respect to an Award.
7.3Indemnification of Committee; No Duties; Waiver of Claims. No member of the Committee, nor any officer or Employee of the Company acting with or on behalf of the Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all of the members of the Committee and each and any officer or Employee of the Company acting with or on their behalf shall be indemnified and protected by the Company in respect of any such action, determination or interpretation to the fullest extentnet cash provided by law. Exceptoperating activities. All references to the extent required by any unwaiveable requirement under applicable law, no member of the Committee (and no officer, Employee or Affiliate of the Company) shall have any duties or liabilities, including without limitation any fiduciary duties,Matador’s adjusted free cash flow are those values attributable to any Participant (or any Person claiming by and through any Participant) as a result of this Plan, any Award or any Claim arising hereunder and,
to the fullest extent permitted under applicable law, each Participant (as consideration for receiving and accepting an Award) irrevocably waives and releases any right or opportunity such Participant might have to assert (or participate or cooperate in) any Claim against any member of the Committee and any officer, Employee or Affiliate of the Company arising out of this Plan.
7.4No Trust or Plan Funding. The Company (and not any of its Affiliates) will be solely responsible for the payment of all amounts hereunder. The Plan shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating assets of the Company for payment of any amounts hereunder. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and any Participant. No Participant, beneficiary or other person shall have any interest in any particular assets of the Company (or any of its Affiliates) by reason of the right to receive any Incentive Compensation under the Plan. To the extent that any Participant acquires a right to receive any payment from the Company pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company.
7.5Governing Law. This Plan shall be construed in accordance with the laws of the State of Texas, withoutMatador shareholders after giving effect to principles of conflict of laws, and the rights and obligations created hereby shall be governed by the laws of the State of Texas. The Participant’s sole remedy for any claim, liability or obligation of any nature, arising out of or relatingadjusted free cash flow attributable to this Plan or an alleged breach of this Plan, or an Award (collectively, “Claims”) shall be against thethird-party non-controlling interests, including in San Mateo.
Adjusted Free Cash Flow—Matador Resources Company and no Participant shall have any claim or right of any nature against any Affiliate or any owner or existing or former director, officer or Employee of the Company or any Affiliate. The individuals and entities described above in thisSection 7.5 (other than the Company) shall be third-party beneficiaries of this Plan for purposes of enforcing the terms of thisSection 7.5.7.6Binding Effect. This Plan shall be binding upon and inure to the benefit of the Company, its successors and assigns, and the Participants and their heirs, assigns and personal representatives.
7.7Construction of Plan. The captions used in this Plan are for convenience only and shall not be construed in interpreting the Plan. Whenever the context so requires, the masculine shall include the feminine and neuter, and the singular shall also include the plural, and conversely.
7.8Integrated Plan. This Plan constitutes the final and complete expression of agreement with respect to the subject matter hereof.
7.9Tax Requirements. The Company (and, where applicable, its Subsidiaries) shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy applicable taxes required by law to be withheld with respect to any payment of any Incentive Compensation to a Participant.
7.10Accounting of Compensation. Unless otherwise specifically provided in such benefit plan, any amounts paid to a Participant hereunder shall not be treated as compensation paid to such Participant for the purposes of any other benefit plan.
7.11Adjustments. In the event of (a) any merger, reorganization, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights, offering, extraordinary dividend (including a spin-off) or other similar change affecting the Company’s common stock; (b) any purchase, acquisition, sale or disposition of a significant amount of assets other than in the ordinary course of business, or of a significant business; (c) any change resulting from the accounting effects of discontinued operations, extraordinary income or loss, changes in accounting as determined under generally accepted accounting principles or restatement of earnings; or (d) any charge or credit resulting from an item which is classified as “non-recurring,” “restructuring” or similar unusual item on the Company’s audited financial statements which, in the case of (a) – (d), results in a change in the components of the calculations of any of the criteria upon which
the Performance Goals are based, as established by the Committee, in each case with respect to the Company or any other entity whose performance is relevant to the achievement of any Performance Goal included in an Award, the Committee shall, without the consent of any affected Participant, amend or modify the terms of any outstanding Award that includes any Performance Goal based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event or events, such that the criteria for evaluating such financial performance of the Company or such other entity (and the achievement of the corresponding Performance Goal) will be substantially the same (as determined by the Committee or the committee of the board of directors of the surviving corporation) following such event as prior to such event;provided,however, that the Committee shall not take any action pursuant to this Section which would constitute an impermissible exercise of discretion pursuant to Code Section 162(m).
ARTICLE 8
AMENDMENT, MODIFICATION, SUSPENSION
Except as provided inSection 7.11, the Committee may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend or discontinue the Plan in whole or in part;provided,however, that no amendment that requires shareholder approval in order for the Plan and Awards under the Plan to comply with any applicable law or the rules and regulations of any applicable stock exchange shall be effective unless such amendment shall be approved by the requisite vote of the shareholders of the Company entitled to vote thereon, andfurther provided, that any amendment that modifies any pre-established Performance Goal for a Participant who is a Covered Employee (or his successor(s), as may be applicable) under this Plan with respect to any particular Performance Period may only be effected on or prior to that date which is ninety (90) days following the commencement of such Performance Period. In addition, the Board shall have the power to discontinue the Plan in whole or in part and amend the Plan in any manner advisable in order for Incentive Compensation granted under the Plan to qualify as “performance-based” compensation under Code Section 162(m) (including amendments as a result of changes to Code Section 162(m) or the regulations thereunder to permit greater flexibility with respect to Incentive Compensation granted under the Plan).
ARTICLE 9
EFFECT OF THE PLAN
Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any Participant any right to be granted Incentive Compensation or any other rights. In addition, nothing contained in this Plan and no action taken pursuant to its provisions shall be construed to (a) give any Participant any right to any compensation, except as expressly provided herein; (b) be evidence of any agreement, contract or understanding, express or implied, that the Company or any Subsidiary will employ a Participant in any particular position; (c) give any Participant any right, title or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations hereunder; or (d) create a trust of any kind or a fiduciary relationship between the Company and a Participant or any other person.
ARTICLE 10
SECTION 409A COMPLIANCE
This Plan is intended to comply with Section 409A and shall be interpreted in a manner consistent with Section 409A. To the extent (i) any payment to which a Participant becomes entitled under this Plan in connection with the Participant’s Termination of Service with the Company (for reasons other than death) constitutes a payment of deferred compensation subject to Section 409A, and (ii) the Participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A to whom the following provisions must apply, then such payment shall not be made or commence until the earliest of (A) the
expiration of the six (6) month period measured from the date of Participant’s Termination of Service with the Company; or (B) the date of the Participant’s death following such Termination of Service. Upon the expiration of the applicable deferral period, any payment which would have otherwise been made during that period in the absence of thisArticle 10 shall be made to the Participant or the Participant’s beneficiary.
ARTICLE 11
TERM
The effective date of this Plan shall be as of January 1, 2016, subject to shareholder approval. The material terms of this Plan shall be disclosed and submitted to the shareholders of the Company at the next annual meeting of shareholders and thereafter every five (5) years (unless earlier terminated) for approval in accordance with the requirements of Code Section 162(m). This Plan and any benefits granted hereunder shall be null and void if shareholder approval is not obtained at the applicable meeting of shareholders of the Company, and no award or payment of Incentive Compensation under this Plan to any Covered Employee shall be made unless such applicable shareholder approval is obtained. This Plan shall remain in effect until it is terminated by the Committee or the Board. After termination of the Plan, no future Awards may be made. However, all Awards granted before such termination will continue to be effective in accordance with their terms and conditions.
*********
IN WITNESS WHEREOF, the Company has caused this instrument to be effective as of the 1st day of January, 2016 pursuant to prior action taken by the Boards of Directors of the Company.
| | | | | | | Year Ended | | December 31, 2023 | | (In Thousands) | | | Net cash provided by operating activities | $ | 1,867,828 | | | Net change in operating assets and liabilities | (50,027) | | San Mateo discretionary cash flow attributable to non-controlling interest in subsidiaries(1) | (82,163) | | | Performance incentives received from Five Point | 38,200 | | | Total discretionary cash flow | $ | 1,773,838 | | | Drilling, completion and equipping capital expenditures | 1,192,800 | | | Midstream capital expenditures | 165,719 | | | Expenditures for other property and equipment | 3,636 | | | Net change in capital accruals | (6,288) | | San Mateo accrual-based capital expenditures related to non-controlling interest in subsidiaries(2) | (42,073) | | Total accrual-based capital expenditures(3) | 1,313,794 | | | Adjusted free cash flow | $ | 460,044 | |
(1) Represents Five Point’s 49% interest in San Mateo discretionary cash flow. (2) Represents Five Point’s 49% interest in accrual-based San Mateo capital expenditures. (3) Represents drilling, completion and equipping costs, Matador’s share of San Mateo capital expenditures plus 100% of other midstream capital expenditures not associated with San Mateo. 96Matador Resources Company | 2024 Proxy Statement
| | | | | | MATADOR RESOURCES COMPANY | 5400 LBJ FREEWAY, SUITE 1500 DALLAS, TEXAS 75240 | | By:
| | | Name:
| | | Title:
| | |
Signature Page to the Matador Resources Company
Amended and Restated Annual Incentive Plan
MATADOR RESOURCES COMPANY
5400 LBJ FREEWAY, SUITE 1500
DALLAS, TX 75240
 | | | VOTE BY INTERNET -www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M.p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-69031-800-690-6093 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | | | | | | | | V34260-P07962 | | | KEEP THIS PORTION FOR YOUR RECORDS | | | | | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MATADOR RESOURCES COMPANY | | | | | | | | | For
All
| | Withhold
All
| For All
Except
| | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | | | 1.
| | Election of Directors Director Nominees: | | For | ¨
Against | Abstain | | ¨
| | ¨
| | | | | | | | | | | | | | | | | Nominees | | | | | | | | | | | | | | | | | | 1a. | William M. Byerley | | o | o | 01
o | | Craig T. Burkert 02 Gregory E. Mitchell 03 Steven W. Ohnimus
| | | | | | | The Board of Directors recommends you vote FOR proposals 2, 3 and 4. the following proposal: | For | For
Against | Abstain | | Against
| Abstain
| | | | | | 2.
| | Vote to approve the Company’s Amended and Restated Annual Incentive Plan.
| | ¨
| | ¨
| | ¨
| | 1b. | Monika U. Ehrman | | o | o | 3.
o | | | Advisory vote to approve the compensation of the Company’s named executive officers.
| | ¨
| ¨
| | ¨
| | | | | | | | | | | | | | | | | | 1c. | Kenneth L. Stewart | | o | o | 4.
o | | 4. | Ratification of the appointment of KPMG LLP as the Company’sCompany's independent registered public accounting firm for the year ending December 31, 2016. 2024. | o | ¨
o | o | | ¨
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| | | | | | | | | | | | | | | | | 1d. | Susan M. Ward | | o | o | o | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote AGAINST proposal 5.FOR the following proposal: | For | For
Against | Abstain | | Against
| | Abstain
| | | | | | | | 5.
| | Shareholder proposal regarding a majority voting standard for director elections.
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| | | 2. | Advisory vote to approve the compensation of the Company's named executive officers. | o | o | o | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote 1 YEAR on the following proposal: | 1 Year | 2 Years | 3 Years | 4 Years | | NOTE:The proxies are authorized to vote in their discretion on such other business as may properly come before the meeting or any adjournment thereof. | | | | | | | | | | | | | | | | | | | | | 
| 3. | Advisory vote on the frequency of future advisory votes to approve named executive officer compensation.
| o | o | o | o | | | | | | | | | | | | | | | | | | | | | | Yes | | No | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Yes | No | | | | | | | | | | | | | | | | | | | | | | | | Please indicate if you plan to attend this meetingmeeting: | o | ¨o | | | ¨ | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | Date | | | Signature (Joint Owners) | Date | | Date | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report for the year ended December 31, 2023, Notice of Annual Meeting and Proxy Statement are available at www.proxyvote.com
| | | | | | | | | | | | | | | | V34261-P07962 | | | | | | | | | | | | | | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report for the year ended December 31, 2015, Notice of Annual Meeting and Proxy Statement is/are available atwww.proxyvote.com.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MATADOR RESOURCES COMPANY Annual Meeting of Shareholders June 9, 201613, 2024 9:30 A.M. This proxy is solicited by the Board of Directors. | | | | | | | 
| | Directors As an alternative to completing this form, you may enter your vote instruction by telephone at 1-800-690-6903,1-800-690-6093 or via the internet at www.proxyvote.com. www.proxyvote.com. Have your proxy card in hand and follow the instructions.
The shareholder hereby appoints Joseph Wm. Foran and David M. Laney,Timothy E. Parker, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of MATADOR RESOURCES COMPANY that the shareholder is entitled to vote at the Annual Meeting of Shareholders to be held at 9:30 A.M., CDT on June 9, 2016,13, 2024, at the Westin Galleria, DallasHilton Anatole, Imperial Ballroom, 13340 Dallas Parkway,2201 N. Stemmons Freeway, Dallas, Texas 75240,75207, and any adjournment or postponement thereof. The shareholder hereby revokes any proxy or proxies heretofore given to vote upon or act with respect to such shares of stock. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’Directors' recommendations. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Continued and to be signed on reverse side | | | | | | | | | | | | | | | | | | | |
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