UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
| | Filed by the Registrant | | Filed by a Party other than the Registrant |
| Check the appropriate box: | |
| Preliminary Proxy Statement |
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material under §240.14a-12 |
ANTERO RESOURCES CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Payment of Filing Fee (Check the appropriate box): | |
| No fee |
| Fee paid previously with preliminary materials |
| Fee computed on table |
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JUNE 8:30 A.M. Mountain Time
Antero Principal Executive Offices 1615 Wynkoop Street
|   | NOTICE
of
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The 2021 Annual Meeting of Stockholders of Antero Resources Corporation (“Antero”) will be held online on Wednesday, June 16, 2021, at 8:30 A.M. Mountain Time. The Annual Meeting is being held for the purposes listed below:
AGENDA
| The 2023 Annual Meeting of Stockholders of Antero Resources Corporation (“Antero”) will be held online on Tuesday, June 6, 2023, at 8:30 A.M. Mountain Time. The Annual Meeting is being held for the purposes listed below: | |
| AGENDA | |
| 1. | Elect the |
| 2. | Ratify the appointment of KPMG LLP as Antero’s independent registered public accounting firm for the year ending December 31, |
| 3. | Approve, on an advisory basis, the compensation of Antero’s named executive officers, |
| 4. | Approve the amendment to Antero’s amended and restated certificate of incorporation (“Charter”) to refect new Delaware law provisions regarding officer exculpation (the “Exculpation Amendment”), |
| 5. | Transact other such business as may properly come before the meeting and any adjournment or postponement thereof. |
| These proposals are described in the accompanying proxy materials. | |
| RECORD DATE | |
| April 17, 2023 | |
| By order of the Board of Directors, | |
 | |
| Yvette K. Schultz | |
| Chief Compliance Officer, Senior Vice President—Legal, General Counsel and Corporate Secretary | |
These proposals are described in the accompanying proxy materials.
RECORD DATE
April 20, 2021
By order of the Board of Directors,
Glen C. Warren, Jr.
President, Chief Financial Officer and Secretary
WHO MAY VOTE:
You will be able to vote at the Annual Meeting only if you were a stockholder of record at the close of business on April 20, 2021,17, 2023, the record date for the Annual Meeting. The Board requests your proxy for the Annual Meeting, which will authorize the individuals named in the proxy to represent you and vote your shares at the Annual Meeting or any adjournment or postponement thereof.
HOW TO RECEIVE ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING MATERIALS:
Pursuant to rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy solicitation materials electronically, rather than mailing paper copies of these materials to each stockholder. Beginning on April 28, 2021,27, 2023, we will mail to each stockholder a Notice of Internet Availability of Proxy Materials with instructions on how to access the proxy materials, vote, or request paper copies.
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 16, 2021:6, 2023:
This Notice of Annual Meeting and Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 20202022 (the “Form 10-K”) are available on our website free of charge at www.anteroresources.com in the “SEC Filings” subsection of the “Investors” section.
YOUR VOTE IS IMPORTANT
Your vote is important. We urge you to review the accompanying Proxy Statement carefully and to submit your proxy as soon as possible so that your shares will be represented at the meeting.
| REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: |   |   |   |   | ||||
| If you are a registered stockholder as of the record date, you may vote your shares or submit a proxy to have your shares voted by one of the following methods: | INTERNET Use the website | BY Use the toll-free | BY MAIL Sign, date and | DURING THE Vote online during the |
Table of Contents
| PROXY STATEMENT |
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PROXY STATEMENT
This summary highlights information contained in this Proxy Statement. This proxy summary does not contain all of the information you should consider, and you should read this entire Proxy Statement before voting.
Some highlights of our ESG and corporate responsibility efforts appear below. Please visit https://www.anteroresources.com/esg for more information and a link to our most recent ESG report.
The largest contribution in making usAntero a responsible and sustainable company comes from our talented and experienced employees. We encourage our employees to embrace the belowour values, and work every day to make these values apparent in all that we do.
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| – | Identification – behavior-based safety programs, job safety analysis, emergency response drills and contractor vetting through a reputable third-party vendor | |
| Mitigation – contractor safety improvement plans, root cause analyses, risk ranking/mitigation reviews, | ||
| • | Our success as a company is not only measured by our financial results but also by how we treat our employees. We |
| – | Healthcare coverage – medical and prescription, dental and vision | |
| Financial assistance – health savings accounts, student loan repayment reimbursement, dependent care flexible spending account coverage and 401(k) plan with matching up to 6% | ||
| Insurance – basic life, accidental death and disability, short-term | ||
| Lifestyle – employee assistance program, holidays and personal choice days, paid vacation and sick leave, company-paid parental leave, subsidized gym memberships and free parking and public transportation | ||
| • | We have continued to operate throughout the COVID-19 pandemic, in some cases subject to federal, state and local regulations, and we have taken and continue to take steps to protect the health and safety of our workers. In response to the COVID-19 pandemic, we have: |
| Implemented protocols that we believe to be in the best interest of our employees, as well as the communities in which we operate, and that comply with government orders, when applicable. | ||
| – | During 2022, transitioned from a hybrid working arrangement for non-field level employees, which involved a combination of in-office and remote work-from-home arrangements, to an in-office working arrangement for all non-field level employees. | |
| • | Doing the right thing is essential to our culture. To that end, we conduct an annual, company-wide ethics and compliance training program that covers, among other things, ethical business practices, insider trading, and anti-discrimination and anti-harassment. |
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| • | We respect human rights and promote them in our supply chain by, among other things, adhering to our internal policies, including: |
| – | Supplier Code of Conduct – promotes the fair and ethical treatment | |
| – | Human, Labor and Indigenous Rights Policy |
We are committed to enhancing the communities where we live and work. Recent highlights of our community engagement and investment include:
| Together with Antero Midstream Corporation (“Antero Midstream”): |
| – | Donated $147,000 in grant funding from the Antero Foundation to nearly 50 regional food pantries across West Virginia and Ohio | |
| – | Improved community infrastructure in West Virginia and Ohio through nearly $300 million in improved road and infrastructure upgrades since 2014 | |
| • | Through the Antero Foundation, in 2022, Antero and Antero Midstream: |
| – | Established an employer matching campaign to assist the Colorado communities affected by the Marshall fires | |
| – | Contributed meaningful employment opportunities in the Appalachian Region | |
| – | Donated much-needed funds and equipment to healthcare providers in response to the COVID-19 pandemic | |
| + $828K | Over $2.5MM | |||
| donated to philanthropic and community endeavors, including to food pantries and food banks in West Virginia and Ohio | donated in the last five years | |||
We recognize the importance of supporting and promoting diversity in our workplace. Our Diversity and Inclusion Policy promotes diversity and equal opportunity in the hiring process by prohibiting all forms of unlawful discrimination based on, among other things, age, race, ethnicity, religion, sex, gender identity and other impermissible factors. In addition, we identify qualifications, attributes, and skills that are important to be represented on the Board. We consider individuals of all backgrounds, skills and viewpoints when seeking employees and candidates for Board service.
As set forth in our Diversity and Inclusion Policy and our Nominating & Governance Committee Charter, we view diversity broadly to include diversity of backgrounds, skills and viewpoints as well as traditional diversity concepts such as race, gender, national origin, religion, sexual orientation or identity. Our Diversity and Inclusion Policy and our Nominating and Governance Committee Charter require that each pool of candidates to be considered to fill a vacancy on the Board shall include at least one individual who would be considered diverse based on traditional diversity concepts. We also consider the value of diversity in our hiring process. Our outside recruiters are asked to review our Diversity and Inclusion Policy and implement practices that
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Diversityalign with it, including providing us with a diverse pool of employee candidates. We monitor employee metrics in areas such as gender, age and ethnicity.
In recent years, we have promoted a number of women to senior management roles, including Chief Compliance Officer, Senior Vice President—Legal and General Counsel, Chief Accounting Officer and Senior Vice President—Accounting, Senior Vice President—Geology and Vice President—Production. In 2022, over one-third of our newly hired employees at Antero and Antero Midstream identified as diverse.
As of December 31, 2022:
| 24% | 3 | 30% | ||
| of our employees are women | out of seven independent directors are women | of our directors and senior vice presidents are women | ||
Our Board has ultimate oversight over the company’s operational performance and ethical conduct. This includes, in partnership with our executive leadership team, managing our risk mitigation. Highlights of our corporate, environmental and social governance programs include:
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| – | Seven out of eight directors are independent | |
| – | We have an independent lead director | |
| – | Each Board committee is comprised entirely of independent directors | |
| – | The ages of our | |
| • | Focus on Environmental and Social Matters |
| – | We have an ESG Committee of | |
| – | We have an ESG Advisory Council, made up of leaders from across the organization, that develops a centralized, systematic approach for identifying, managing and communicating ESG risks and opportunities | |
| – | 15% of executive compensation is tied to ESG performance | |
| – | 100% of employees completed training for our Human Labor and Indigenous Rights Policy, our Diversity and Inclusion Policy | |
| • | Valuing investor feedback and alignment with stockholders |
| – | We proactively engage with stockholders and other stakeholders, including with respect to ESG programs and performance | |
| – | Our executive compensation program and robust stock ownership guidelines applicable to directors and executives were thoughtfully designed to incentivize the maximization of shareholder value | |
| – | Our corporate policies generally prohibit hedging or pledging company stock |
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GovernanceWe believe safety and environmental stewardship are intrinsically linked. Our goal of Zero incidents, Zero harm, and Zero compromise empowers every employee to make the safest decisions to protect our people and the planet. Our dedicated staff of health, safety, security and environmental (“HSSE”) professionals manage our HSSE programs and are committed to our performance as a safe and sustainable energy company. In addition, stewardship of the environment is a fundamental value in our overall business strategy. In 2022, we were again named one of Newsweek’s Top 400 Most Responsible Companies, finishing with one of the highest environmental scores among our industry peers.
2022 ESG highlights include
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Reduced our Scope 1 GHG emissions by approximately 10% from our 2021 performance | ||||
Safety and Sustainability(1)
87% total produced water | Our methane intensity rate of 0.014% and methane leak loss rate of 0.016% are industry leading | ||||
| • | ESG disclosures are aligned with the Sustainability Accounting Standards Board (SASB) and the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) |
| • | Management regularly reports to the Board ESG Committee on pertinent ESG risks and opportunities, including climate related topics |
| • | Utilized our GHG & Methane Reduction Working Group and ESG Advisory Council to identify emission-reduction opportunities |
| • | Ranked #1 oil and gas company for environmental performance in Rystad’s 2022 ESG Scorecard Report |
| • | Already achieved our 2025 goal of a 50% reduction in our industry-leading methane leak loss rate and 10% reduction in Scope 1 GHG emissions from our 2019 baseline |
| • | Continued progress on our goal to achieve Net Zero Scope 1 (direct) and Scope 2 (indirect from the purchase of energy) emissions by 2025 through implementation of emission reduction practices and technologies |
| • | Committed to replace or convert all of our natural gas-driven pneumatics by the end of 2025, with over 6,200 pneumatics addressed since 2021 |
| • | Reduced the number of leaks per inspection from 2021 through our leak detection and repair program |
| • | Received a Responsibly Sourced Gas certification with respect to certain well pads following the completion of a pilot project with Project Canary |
| • | Continue to be an industry leader with one of the lowest rates for both lost time injuries and OSHA recordable injuries, achieving a very low lost time incident rate of 0.048% and recordable incident rate of 0.434% for employees and contractors |
| • | An active member of the U.S. EPA Natural Gas STAR program, ONE Future, The Environmental Partnership, and the Colorado State University’s Methane Emissions Technology Evaluation Center. Our participation in these organizations and programs provides us with information and resources as we continue our efforts to reduce Scope 1 and Scope 2 GHG emissions |
| (1) | Data retrieved from |
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Community Engagement
2020 Business Performance Highlights
During 2020, we focused on reducing outstanding debt, opportunistically disposed of assets pursuant to an asset sale program, reducing drilling and completion capital spending, and focused on well cost reductions.
Debt Reduction. We addressed near-term bond maturities and reduced absolute debt by over $750 million year-over-year.
Asset Sales. Since December 2019, we have closed $751 million in asset sales, including: (i) selling Antero Midstream stock ($100 million); (ii) completing an overriding royalty transaction ($402 million); (iii) entering into a volumetric production payment agreement ($220 million); and (iv) effecting certain hedge monetizations ($29 million).
Drilling and Completion Spending. We reduced drilling and completion capital from $1.15 billion (initial 2020 budget) to $735 million.
Well costs. We reduced well costs over 30% from $970 per foot during the first quarter of 2019 to $675 per foot during the second half of 2020.
During 2020, Antero also saw a substantial increase in the market price of our common stock, which closed as low as $0.67 per share in April 2020, increasing to a closing price of $5.45 on December 31, 2020 and recently closing at $9.16 on April 22, 2021. Antero’s share price increased by 91% during 2020, from $2.85 per share on December 31, 2019 to $5.45 on December 31, 2020.
Antero and the Board value input from Antero’s stockholders, and we are committed to maintaining an open dialogue to receive feedback on important items. In 2020,2022, we continuedmet with stockholders to maintain open dialogue with our stockholders with regard to governance-related issues, includingdiscuss, among other things, environmental and social matters and compensation.matters.
Corporate GovernanceExecutive Compensation Highlights
In 2020, the Board, with guidance from the ESG committee, continued to focus on improving the Company’s social governance practices. For example, in 2020 we adopted the following new policies and codes of conduct, which are available on the Company’s website:
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| – | net cash provided by operating activities increased by $1.4 billion, or 84%, from $1.7 billion in 2021 to $3.1 billion in 2022; | |
| – | long-term debt decreased by $942 million, or 44%, from $2.1 billion in 2021 to $1.2 billion in 2022; and | |
| – | the Company repurchased 25 million shares of our common stock, or approximately 8% of common stock outstanding. |
Executive Compensation Highlights
Below is a summary of key components and decisions regardingof our executive compensation program for, 2020:
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| Long-term incentive compensation awards are 50% performance-based for our | |
| • | Executive compensation is tied in part to a qualitative assessment of ESG performance by the Compensation Committee. Key ESG performance highlights include: |
| – | ranked #1 oil and gas company for environment in Rystad’s 2022 ESG Scorecard Report; | |
| – | upgraded to an “A” from “BBB” by MSCI ESG; and | |
| – | completed Project Canary pilot project with respect to certain well pads. | |
| • | The annual incentive plan for 2022 included metrics we felt were key to value creation, including operational strategy (disciplined capital expenditures and production volume), leverage goals, cash cost containment and ESG goals. After giving consideration to the results of the annual incentive program of 103.9%, the Compensation Committee felt that such result did not adequately reflect the performance of the Named Executive Officers. As a result, the Compensation Committee increased the annual incentive program payout to reflect 150% of target performance. The Compensation Committee considered market-based information presented by NFP Compensation Consulting (“NFPCC”), formerly Longnecker & Associates, the Compensation Committee’s independent compensation consultant, the Company’s superior stock performance (2022 TSR of 77%, leading all peers) and operating results. The full details of our annual incentive plan metrics, |
| • | Performance awards with a performance period ending in |
| • | Each of the Named Executive Officers is employed at-will and none of the Named Executive Officers is party to an employment agreement, severance agreement or change in control agreement. |
Current DirectorsBelow is a summary of material changes to the Company’s compensation program or philosophy during 2022. These changes were made after consultation with NFPCC and Board Nominees(1)after a review of individual Named Executive Officers and Company performance. The Compensation Committee feels that these changes were not only appropriate but important to retain, appropriately reward, and motivate our world-class executive team, particularly in light of:
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| • | We want our Named Executive Officers as focused on our long-term sustainable growth as we are. Our executive compensation program should be competitive with our peers, particularly those we are outperforming. In the fall of 2022, after an evaluation of the value of the performance and equity compensation grants made by the Company over the previous three years as compared to its peers, the Compensation Committee granted additional long-term incentive awards, half of which were performance-based, to the Named Executive Officers as a correction of a misalignment between pay and performance. This resulted in an increase in value of equity awards for 2022 as compared to 2021. |
We were recently named as one of Newsweek’s Top 400 Most Responsible Companies, where we finished with one of the highest environmental score among our industry peers. In addition, we continue to be an industry leader with one of the lowest rates for both lost time injuries and Occupational Health and Safety Administration recordable injuries. For 2020, we and our contractors experienced a combined lost time incident rate (LTIR) of 0.0484%, which is 83.75% lower than the U.S. onshore oil and gas average of 0.32% (data provided by International Supplier Network).
In 2020, we demonstrated peer-leading performance in our GHG intensity and methane leak loss rate, and we continue to have one of the lowest GHG intensities and methane leak loss rates in the industry.
We are an active member of the U.S. EPA Natural Gas STAR program, ONE Future, The Environmental Partnership, and the Colorado State University’s Methane Emissions Technology Evaluation Center. Our participation in these organizations and programs provides us with additional information and resources as we continue our efforts to reduce GHG emissions. As a result of our fresh water pipeline infrastructure, Antero Midstream eliminated 471,000 water truck trips in 2020, leading to reduced GHG emissions. Antero Resources and Antero Midstream recycled and reused 83% of flow-back and produced water in 2020 and decreased fresh water usage by 73% in 2020, compared to 55% in 2019.
| Director | Committee Memberships | |||||||||||||||||
| Name | Class | Age | Occupation | Director Since | Audit | Comp | Nom & Gov | Conflicts | ESG | |||||||||
| Paul M. Rady Chairman of the Board | Class I | 69 | Antero’s Chief Executive Officer and President | 2004 | ||||||||||||||
| Brenda R. Schroer | Class I | 47 | Chief Financial Officer of Endeavor Energy Resources | 2021 |  |  | ||||||||||||
| Thomas B. Tyree, Jr. | Class I | 62 | Chairman of Northwoods Energy LLC | 2019 |  | | | |||||||||||
| W. Howard Keenan, Jr. | Class II | 72 | Member of Yorktown Partners LLC | 2004 | | | ||||||||||||
| Jacqueline C. Mutschler | Class II | 61 | Independent Director of Weatherford International plc; Executive Consultant | 2020 | | | | | ||||||||||
| Robert J. Clark | Class III | 78 | Former Chairman of 3 Bear Energy, LLC | 2013 | | | | |||||||||||
| Benjamin A. Hardesty Lead Director | Class III | 73 | Owner of Alta Energy LLC | 2013 | |  | | |||||||||||
| Vicky Sutil | Class III | 58 | Independent Director of Delek US Holdings, Inc. | 2019 | | | ||||||||||||
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Board Composition Highlights
This Proxy Statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Antero Resources Corporation (“Antero” or the “Company”) for use at the 2021 Annual Meeting of Stockholders (the “Annual Meeting”). The Annual Meeting will be held online on Wednesday, June 16, 2021, at 8:30 A.M. Mountain Time. The record date for the Annual Meeting is April 20, 2021.
Online Meeting
We are pleased this year to conduct the Annual Meeting solely online via the Internet through a live webcast and online stockholder tools. We are conducting the Annual Meeting virtually because we believe a virtual format facilitates stockholder attendancemakes it easier for stockholders to attend and participation. Thisparticipate. Moreover, this format empowers stockholders around the world to participate at no cost. We have designed the
Here are several ways our virtual format towill enhance stockholder access and participation and to protect stockholder rights. For example:rights:
| • | We Encourage Questions. Stockholders |
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| • | We Believe in Transparency. Although the live webcast is available only to stockholders at the time of the meeting, |
| • | We Proactively Take Steps to Facilitate Your Participation. During the Annual Meeting, we will offer live technical support for all stockholders attending the meeting. |
You are entitled to attend and participate in the virtual Annual Meeting only if you were a stockholder as of the close of business on April 20, 202117, 2023 or if you hold a valid proxy for the Annual Meeting. If you are not a stockholder, you may still view the meeting after the recording has been posted on our Investor Relations website.
Attending Online. If you plan to attend the Annual Meeting online, please be aware of whatread the instructions below so you will needunderstand how to gain admission, as described below.admission. If you do not comply with thethese procedures, described here for attending the Annual Meeting online, you will not be able to participate in the Annual Meeting.
Stockholders may participate in the Annual Meeting by visiting www.virtualshareholdermeeting.com/ AR2021.
To attend online and participate in the Annual Meeting, stockholdersAR2023. If you are a stockholder of record, must use theiryou will need the control number on theiryour Notice of Internet Availability (the “Notice”) or proxy card to log into www.virtualshareholdermeeting.com/AR2021.in. For beneficial stockholders who do not have a control number, instructions to gain access to the meeting may be provided on the voting instruction card provided by theiryou receive from your broker, bank, or other nominee.
Stockholders of record—those holding hold shares directly with American Stock Transfer and Trust Company LLC—will be on a list maintained by the inspector of elections.
“Beneficial”LLC. “Beneficial” or “street name” stockholders—those holdinghold shares through a broker, bank, or other nominee.
We encourage you to access the meeting prior to the start time. Please allow ample time for online check-in, whichto check in to the virtual meeting. The site will beginbe available beginning at 8:15 A.M. Mountain Time. We will have technicians ready to assist if you have difficulties accessing or participating in the virtual meeting during the check-in time or during the Annual Meeting. Ifat (844) 986-0822 (if you encounter any difficulties accessing the virtual meeting during the check-in or course of the Annual Meeting, please call: ifare in the United States, toll-free at (844) 986-0822;U.S.); or if international, (303) 562-9302.562-9302 (if you are outside the U.S.).
Asking Questions. Stockholders who wish to submit a question in advance may do so on our Annual Meeting website, www.virtualshareholdermeeting.com/AR2021,www.virtualshareholdermeeting. com/AR2023, which will be open 15 minutes prior to the start time ofbefore the Annual Meeting.Meeting begins. Stockholders also may submit questions live during the meeting. We plan to reserve up to 20 minutes for appropriate stockholder questions to be read and answered by Company personnel during the meeting. Stockholders can also access copies of this Proxy Statement and annual report at our Annual Meeting website. In submitting questions, please note thatmeeting, but we will only address questions that are germane to the matters being voted on at our Annual Meeting. Stockholders can also access copies of this Proxy Statement and annual report at our Annual Meeting website.
Whether you are a stockholder of record or a beneficial stockholder, you may direct how your shares are voted without participating in the Annual Meeting. We encourage stockholders to vote well before the Annual Meeting, even if they plan to attend the virtual meeting, by completing proxies online or by telephone, or, if they received printed copies of these materials, by mailing their proxy cards. Stockholders can vote via the Internet in advance of or during the meeting. Stockholders who attend the virtual Annual Meeting should follow the instructions at www.virtualshareholdermeeting.com/AR2021 to vote during the meeting.attend. If you are a registered stockholder as of the record date, you may vote your shares or submit a proxy to have your shares voted by one of the following methods:
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| • | In Person |
If you are a beneficial stockholder, (meaning your shares are held in “street name” by a broker or bank as of the record date), you will receive instructions from the holder of record that you must follow for your shares to be voted. Most banks and brokers offer Internet and telephone voting. If you do not give voting instructions, your broker will not be permitted to vote your shares on any matter that comes before the Annual Meeting except the ratification of our auditors.
As of the record date, 301,900,695 shares of common stock were outstanding and entitled to be voted at the Annual Meeting.
Revoking Your Proxy or Changing Your Vote. Stockholders of record may revoke their proxy at any time before the electronic polls close by submitting a later-dated vote via the Internet, by telephone or by mail; by delivering instructions to our Secretary before the Annual Meeting commences; or by voting online in person during the Annual Meeting. Simply attending the meeting will not affect a vote that you have already submitted.
Beneficial stockholders may revoke any prior voting instructions by contacting the broker, bank, or other nominee that holds their shares prior to the Annual Meeting or by voting online during the meeting.
This Proxy Statement includes “forward-looking statements.” Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under Antero Resources’ control. All statements, except for statements of historical fact, made in this Proxy Statement regarding activities, events or developments Antero Resources expects, believes or anticipates will or may occur in the future, such as those regarding Antero Resources’ (1) ability to achieve its Net Zero, methane leak loss rate and GHG emissions goals; (2) its plans, strategies, initiatives, and objectives; (3) our assumptions and expectations; (4) the scope and impact of our ESG risks and opportunities; and (5) standards and expectations of third parties are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Company goals are aspirational and not guarantees or promises that goals will be met. All forward-looking statements speak only as of the date of this hereof. Although Antero Resources believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Except as required by law, Antero Resources expressly disclaims any obligation to and does not intend to publicly update or revise any forward-looking statements.
The actual conduct of our activities, including the development, implementation or continuation of any goals (including sustainability goals), commitments, strategies, initiatives, and objectives, discussed or forecasted in this report may differ materially in the future. In addition, many of the standards and metrics used in preparing this Proxy Statement and the 2021 ESG Report, and other sustainability information provided by the Company continue to evolve and are based on management expectations and assumptions believed to be reasonable at the time of preparation but should not be considered guarantees. The standards and metrics used, and the expectations and assumptions they are based on, have not been verified by any third party. Statistics, metrics, and measurements relating to ESG matters are estimates and may be based on assumptions or developing standards. Assumptions, standards, statistics, metrics, and measurements used in preparing this report continue to evolve, and these statements are based on management’s beliefs, assumptions, and expectations based on currently available information, are not guarantees of future performance, and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in our most recent filings with the Securities and Exchange Commission (“SEC”) on Form 10-K and Form 10-Q. While we anticipate continuing to monitor and report on certain sustainability information, we cannot guarantee that such data will be consistent year-to-year, as methodologies and expectations continue to evolve. We hereby expressly disclaim any
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obligation or duty not otherwise required by legal, contractual, and other regulatory requirements to update, correct, provide additional details regarding, supplement, or continue providing such data, in any form, in future. Furthermore, there are sources of uncertainty and limitations that exist that are beyond our control and could impact the Company’s plans and timelines, including the reliance on technological and regulatory advancements and market participants’ behaviors and preferences.
In addition, while we seek to align these disclosures with the recommendations of various third-party frameworks, such as the Task Force on Climate-Related Financial Disclosures, we cannot guarantee strict adherence to these framework recommendations. Additionally, our disclosures based on these frameworks may change due to revisions in framework requirements, availability of information, changes in our business or applicable governmental policy, or other factors, some of which may be beyond our control. Moreover, with regards to our participation in, or certification under, various frameworks, we may incur certain costs associated with such frameworks and cannot guarantee that such participation or certification will have the intended results on our or our products’ ESG profile. In addition, the calculation of the methane leak loss rate disclosed in the 2021 ESG Report is based on ONE Future protocol, which is based on the EPA Greenhouse Gas Reporting Program currently in effect. We also calculate our Scope 1 emissions in accordance with the EPA Greenhouse Gas Program, which is subject to change, and revisions to this program could result in the calculation of increased emissions from our operations, which in turn could impact our ability to meet our Scope 1 and 2 GHG emission reduction goals on our proposed timeline. Scope 1 emissions are the Company’s direct greenhouse gas emissions, and Scope 2 emissions are the Company’s indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat or cooling. With respect to its emissions goal, Antero Resources anticipates achieving Net Zero Scope 1 and Scope 2 emissions by 2025 through operational efficiencies and the purchase of carbon offsets; however, such goals are aspirational and we could face unexpected material costs as a result of our efforts to meet these goals. Moreover, given uncertainties related to the use of emerging technologies, the state of markets for and availability of verified quality carbon offsets, we cannot predict whether or not we will be able to meet these goals in a timely fashion, if at all, or whether any offsets we purchase will ultimately achieve the emission reduction it represents.
This Proxy Statement and the 2021 ESG Report contain statements based on hypothetical or severely adverse scenarios and assumptions, and these statements should not necessarily be viewed as being representative of current or actual risk or forecasts of expected risk. These scenarios cannot account for the entire realm of possible risks and have been selected based on what we believe to be a reasonable range of possible circumstances based on information currently available to us and the reasonableness of assumptions inherent in certain scenarios; however, our selection of scenarios may change over time as circumstances change. While future events discussed in this Proxy Statement or the 2021 ESG Report may be significant, any significance should not be read as necessarily rising to the level of materiality of certain disclosures included in Antero Resources’ SEC filings.
Antero Resources cautions you that these forward-looking statements are subject to all the risks and uncertainties, incident to the exploration for and development, production, gathering and sale of natural gas, NGLs and oil most of which are difficult to predict and many of which are beyond the Antero Resources’ control. These risks include, but are not limited to, the risks described under the heading “Item 1A. Risk Factors” in Antero Resources’ Annual Report on Form 10-K for the year ended December 31, 2022. Unless otherwise provided, the information contained in this report is expressly not incorporated by reference into any filing of the Company made with the SEC, or any other filing, report, application, or statement made by the Company to any federal, state, tribal, or local governmental authority.
| 12 |
The Board is divided into three classes. Directors in each class are elected to serve for three-year terms and until either they are re-elected, or their successors are elected and qualified, or until their earlier resignationthey resign or removal.are removed. Each year, the directors of one class stand for re-election as their terms of office expire. As previously disclosed, Glen C. Warren, Jr. will retire from the Board effective April 30, 2021 and Paul J. Korus will not stand for re-election and will also retire from the Board in connection with the Annual Meeting. Following the effectiveness of each retirement, the size of the Board will be reduced to eight members and seven members, respectively. We do not intend to fill the vacant seats at the Annual Meeting.
Based on recommendations from our Nominating & Governance Committee, the Board has nominated the following individuals for election as Class III directors of Antero, with terms to expire at the 20242026 Annual Meeting of Stockholders, barring an earlier resignation or removal:
 |  |  | ||
| Paul M. Rady | Brenda R. Schroer | Thomas B. Tyree, Jr. |
BothAll nominees currently serve as Class III directors of Antero. Their biographical information is contained in “Directors” below.
The Board has no reason to believe that any of its nominees will be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, either the size of the Board will be reduced or the individuals acting under your proxy will vote for the election of a substitute nominee recommended by the Board.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES.
 | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES. |
| - |
We recognize the importance of diversity on our Board. Pursuant to our Diversity and Inclusion Policy and the Nominating and Governance Committee Charter, we view diversity broadly to include diversity of backgrounds, skills and viewpoints as well as traditional diversity concepts such as race, gender, national origin, religion or sexual orientation or identity. The Board believes that all directors should have sound business judgment, personal and professional integrity, an ability to work as part of a team, willingness to commit the required time to serve as a Board member, business experience, and financial literacy. The Nominating & Governance Committee considers diversity along with other factors when reviewing director candidates, and our Diversity and Inclusion Policy and our Nominating and Governance Committee Charter require that each pool of candidates to be considered to fill a vacancy on the Board shall include at least one individual who would be considered diverse based on traditional diversity concepts such as race, gender, national origin, religion, or sexual orientation or identity.
As of the date hereof, the Board embodied a diverse set of experiences, qualifications, attributes, and skills, as shown below:
| Rady | Schroer | Tyree | Keenan | Mutschler | Clark | Hardesty | Sutil | |||||||||
| Executive Leadership | • | • | • | • | • | • | • | • | ||||||||
| Financial | • | • | • | • | • | • | • | |||||||||
| Accounting/Audit | • | • | ||||||||||||||
| Risk Management | • | • | • | • | • | • | • | • | ||||||||
| Operations | • | • | • | • | • | • | ||||||||||
| Industry | • | • | • | • | • | • | • | • | ||||||||
| Environmental and/or Climate Change-Related | • | • | • | • | ||||||||||||
| Health or Safety | • | • | ||||||||||||||
| Human Resources Management | • | • | • | • | ||||||||||||
| Cybersecurity | ||||||||||||||||
| Racial/Ethnic Diversity | ||||||||||||||||
| Gender Diversity | • | • | • |
| - 2023 Proxy Statement | 14 |
We were originally formed in 2004 as Antero Resources II Corporation. Through a series of internal reorganization transactions, Antero Resources II Corporation’s successor and certain of its affiliates were merged with and into Antero Resources Appalachian Corporation. That entity was renamed Antero Resources Corporation in June 2013 in connection with our initial public offering.
Set forth below is the background, business experience, attributes, qualifications and skills of each Antero director and director nominee. In some cases, references to our directors’ tenure with Antero date back to our original formation in 2004.
Each of the Class III directors is up for reelection at the Annual Meeting, except for Paul J. Korus, who will retire from the Board in connection with the Annual Meeting. Effective April 30, 2021, Glen C. Warren, Jr. will retire from the Board, and as an officer, of Antero Resources. Following the effectiveness of each retirement, the size of the Board will be reduced to eight members and seven members, respectively.
Class I Directors
Age: 69 Director Since: 2004 Committee Memberships: None | Paul M. Rady
Chairman, Chief Executive Officer and
|
Key Skills, Attributes and Qualifications:
• | Co-Founder of Antero Resources, serving as President of Antero Resources since April 30, 2021 and as Chairman of the Board of Directors and Chief Executive Officer • President of Antero Midstream since April 30, 2021 and |
| Midstream’s simplification transactions (the “Simplification Transactions”) in March 2019 • | Served as Chief Executive Officer and Chairman of Antero’s predecessor company from its founding in 2002 to its ultimate sale to XTO Energy, Inc. in 2005 |
• | Served as President, CEO and Chairman of Pennaco Energy from 1998 until its sale to Marathon in 2001 |
• | Worked with Barrett Resources from 1990 until 1998, moving from Chief Geologist to Exploration Manager, EVP Exploration; President, COO and Director; and ultimately CEO |
• | Began his career with Amoco, where he served ten years as a geologist focused on the Rockies and Mid-Continent |
Has significant experience as a chief executive of oil and gas companies, together with his training as a geologist and broad industry knowledge.
Has significant experience as a chief executive of oil and gas companies, together with his training as a geologist and broad industry knowledge.
Other Public Company Boards:
Antero Midstream; Antero Midstream Partners LP (until March 2019)
| - |
Age: 47 |
Key Skills, Attributes and Qualifications:
• Chief Financial Officer and Board of Managers of Endeavor Energy Resources since January 2023
• Served as Chief Financial Officer of Aris Water Solutions, Inc. (“Aris”) from May 2021 to September 2022. Previously served as Interim Chief Financial Officer at Aris’ predecessor from March 2021 until May 2021 and also served on the Board of Directors of Aris’ predecessor from July 2019 through February 2021 • Served as Senior Vice President, Chief Financial Officer and
|
Key Skills, Attributes and Qualifications:
• Began her career at Ernst & Young LLP focusing on energy clients and technical consultations Has significant experience in the oil and gas industry over several decades. Other Public Company Boards: • N/A | |
Has significant experience as a chief financial officer of oil and gas companies, together with experience as an investment banker and broad industry knowledge.
Other Public Company Boards:
 |
Age: 62 | Thomas B. Tyree, Jr.
•
|
Key Skills, Attributes and Qualifications:
| Chairman of Northwoods Energy LLC, | |
• | In 2021, served as Chief Executive Officer and Director of Extraction Oil & Gas, Inc., a formerly publicly traded upstream oil and gas company. Previously served as Executive Chairman starting in 2020 • From 2006 to 2016, served as President, Chief Financial Officer and as a Director of Vantage Energy, LLC |
• | From 2003 to 2006, served as Chief Financial Officer of Bill Barrett Corporation, |
| a formerly publicly traded company • | Began his career as an investment banker at Goldman, Sachs & Co. from 1989 to 2003 |
Has significant experience in the oil and gas industry over several decades.
Has significant experience in the oil and gas industry over several decades.
Other Public Company Boards:
Extraction Oil & Gas, Inc. (until November 2021); Bonanza Creek Energy, Inc. (until March 2020)
| - |
Class II Directors
Age: 72 | W. Howard Keenan, Jr. Key Skills, Attributes and Qualifications:
•
|
Key Skills, Attributes and Qualifications:
| Since 1997, has been a Member of Yorktown Partners LLC, a private investment manager focused on the energy industry | |
• | From 1975 to 1997, was in the Corporate Finance Department of Dillon, Read & Co. Inc. and active in the private equity and energy areas, including the founding of the first Yorktown Partners fund in 1991 |
• | Serves on the boards of directors of multiple Yorktown Partners portfolio companies |
• | Serves on the Board of Directors of Antero Midstream Has over 40 years of experience with energy companies and investments and broad knowledge of the oil and gas industry. Other Public Company Boards: • Aris Water Solutions, Inc.; Solaris Oilfield Infrastructure, Inc.; Brigham Minerals, Inc. (until the first quarter of 2022); Antero Midstream; Ramaco Resources, Inc. (until 2019); Antero Midstream Partners LP (until 2019); Concho Resources (until 2013); Geomet Inc. (until 2012) |
Has over 40 years of experience with energy companies and investments and broad knowledge of the oil and gas industry.
Other Public Company Boards:
 |
Age: 61 | Jacqueline C. Mutschler Key Skills, Attributes and Qualifications:
•
|
Key Skills, Attributes and Qualifications:
• | Member of Weir Group plc Technology Advisory Board from 2015 to 2017 |
• | From 2006 until retirement in 2014, served as Senior Vice President |
• | Held BP Vice President domestic and international roles between 2001 and 2006, including U.S. unconventional gas production |
• | From 1986 to 2001, held production management, financial business planning and geophysical roles for BP Onshore U.S. and Gulf of Mexico businesses |
Has over 30 years of experience in the oil and natural gas industry, including 28 years with BP plc.
Has over 30 years of experience in the oil and natural gas industry, including 28 years with BP plc.
Other Public Company Boards:
Weatherford International plc
| - |
 |
|
Key Skills, Attributes and Qualifications:
Has over 35 years of experience in the oil and natural gas industry.
Other Public Company Boards:
Class III Directors
Age: 78 | Robert J. Clark Key Skills, Attributes and Qualifications:
•
|
Key Skills, Attributes and Qualifications:
| former Chairman of 3 Bear Energy, LLC, a midstream energy company with operations in the | |
| April 2022 • | Formed, operated and subsequently sold Bear Tracker Energy in 2013 (to Summit Midstream Partners, LP); a portion of Bear Cub Energy in 2007 (to Regency Energy Partners, L.P.), and the remaining portion in 2008 (to GeoPetro Resources Company); and Bear Paw Energy in 2001 (to ONEOK Partners, L.P., formerly Northern Border Partners, L.P.) |
• | Member of both the Executive Committee and the Board of Directors of |
Has significant experience with energy companies, with over 45 years of experience in the industry.
adults who have lost a sibling or spouse
Has significant experience with energy companies, with over 45 years of experience in the industry.
Other Public Company Boards:
N/A
| - |
 |
Age: 73
|
Key Skills, Attributes and Qualifications:
Benjamin A Hardesty (Lead Director) Key Skills, Attributes and Qualifications: • Owner of Alta Energy LLC, a consulting business focused on oil, | |
• | President of Dominion E&P, Inc., a subsidiary of Dominion Energy, Inc. (formerly Dominion Resources Inc.) engaged in the exploration and production of natural gas in North America, from September 2007 until retirement in May 2010. Joined Dominion in 1995 and served as president of Dominion Appalachian Development, Inc. until 2000 and general manager and vice president—Northeast Gas Basins until 2007 |
• | Member of the Board of Directors of Blue Dot Energy Services, LLC from 2011 until its sale to B/E Aerospace, Inc. in 2013 |
• | Member of the Board of Directors of KLX, Inc. from 2014 until its sale to The Boeing Company in 2018 |
• | Member of the Board of Directors of KLX Energy Services Holdings, Inc. from 2018 until its merger with Quintana Energy Services in 2020 |
• | From 1982 to 1995, served successively as vice president, executive vice president and president of Stonewall Gas Company, and from 1978 to 1982, served as vice president, operations of Development Drilling Corp. |
• | Served as an active duty officer in the U.S. Army Security Agency for two years and as a reserve officer |
• | Director emeritus and past president of the West Virginia Oil & Natural Gas Association and past president of the Independent Oil & Gas Association of West Virginia |
• | Trustee and past chairman of the Nature Conservancy of West Virginia and a member of the Board of Directors of the West Virginia Chamber of Commerce |
• | Serves as a member of the Visiting Committee of the West Virginia School of Petroleum and Natural Gas Engineering Department of Statler College of Engineering and Mineral Resources at West Virginia University |
Has significant experience in the oil and natural gas industry, including in Antero’s areas of operation. |
Other Public Company Boards: • KLX Energy Services Holdings, Inc. (until August 2020); KLX Inc. (until October 2018) |
 |
Age: 58 | Vicky Sutil
|
| Key Skills, Attributes and Qualifications: |
| From July 2017 to January 2020, worked with SK E&P Company focusing on strategic planning | |
• | From 2014 to 2016, served as Vice President of Commercial Analysis for CRC Marketing, Inc. |
• | From 2000 to 2014, worked with Occidental Petroleum Corporation in different capacities, including roles in corporate development, mergers and acquisitions and financial planning |
• | Other experience includes ARCO Products Company and Mobil Oil Corporation working as a project engineer and business analyst in the refining and marketing divisions |
Has significant experience in the oil and gas industry, including a background in corporate development, commercial negotiations, corporate planning and project management.
Has significant experience in the oil and gas industry, including a background in corporate development, commercial negotiations, corporate planning and project management.
Other Public Company Boards:
Delek US Holdings, Inc.; Plains All American Pipeline, L.P. (until 2015); Plains GP Holdings, L.P. (until 2015)
| - |
EXECUTIVE OFFICERS
The table below sets forth the name, age and principal position of each of our executive officers as of December 31, 2020. Effective April 30, 2021, Glen C. Warren, Jr. will retire as President, Chief Financial Officer and Secretary of Antero Resources and President and Secretary of Antero Midstream. Mr. Warren will also step down from the board of directors of both companies as of the same date. Effective upon Mr. Warren’s retirement, (i) Paul M. Rady, currently Chairman and Chief Executive Officer of Antero Resources and Antero Midstream, will also be named President of Antero Resources and Antero Midstream and (ii) Michael N. Kennedy, currently Senior Vice President of Finance at Antero Resources and Antero Midstream and Chief Financial Officer of Antero Midstream, will be named Chief Financial Officer of Antero Resources, will cease to be the Chief Financial Officer of Antero Midstream and will continue to serve as Senior Vice President of Finance of Antero Midstream and Senior Vice President of Finance of Antero Resources. Also effective upon Mr. Warren’s retirement, Mr. Kennedy will be appointed to the board of directors of Antero Midstream (the “Antero Midstream Board”).2022.
| Name | Age | Principal Position | ||
| Paul M. Rady | 69 | Chairman of the Board, Chief Executive Officer and | ||
| Chief Financial Officer and | ||||
| Senior Vice President—Finance | ||||
| 41 | Chief Compliance Officer, Senior Vice President— |
Biographical information for Messrs.Mr. Rady and Warren is set forth under “Directors” above. References to a position held by one of the below officers at “Antero” means that the person held such position at Antero Resources Corporation, Antero Midstream, the general partner of Antero Midstream GP LP, and the general partner of Antero Midstream Partners LP, as applicable.
Alvyn A. Schopp has served as Antero’s Chief Administrative Officer and Regional Senior Vice President since January 2020, prior to which he served as Antero’s Chief Administrative Officer, Regional Senior Vice President and Treasurer beginning in February 2014. Mr. Schopp has also served as Antero’s Vice President of Accounting and Administration and Treasurer from January 2005 to September 2013, as Antero’s Controller and Treasurer from 2003 to 2005 and as Vice President of Accounting and Administration and Treasurer of Antero’s predecessor company from January 2005 until its sale to XTO Energy, Inc. in April 2005. From 1993 to 2000, Mr. Schopp was CFO, Director and ultimately CEO of T-Netix, Inc. From 1980 to 1993 Mr. Schopp was with KPMG. As a Senior Manager with KPMG, he maintained an extensive energy and mining practice. Mr. Schopp holds a B.B.A. from Drake University.
Michael N. Kennedy has served as Antero Resources Corporation’s Chief Financial Officer since April 30, 2021 and Antero Resources Corporation’s Senior Vice President of Finance andsince January 2016, prior to which Mr. Kennedy served as Vice President of Finance beginning in August 2013. Mr. Kennedy has also served as Antero Midstream’s Chief Financial Officer,Senior Vice President of Finance since the closing of Antero Midstream’s simplification transactions (the “Simplification Transactions”)the Simplification Transactions in March 2019. Prior to the Simplification Transactions, Mr. Kennedy served as Antero Midstream’s Chief Financial Officer from the closing of the Simplification Transactions in March 2019 until April 30, 2021 as well as the Chief Financial Officer and Antero Resources Corporation’s Senior Vice President of Finance of the general partner of Antero Midstream GP LP beginning in January 2016, prior to which he servedApril 2017 and as Chief Financial Officer and Senior Vice President of Finance of the general partner of Antero Midstream Partners LP beginning in August 2013.February 2014. Mr. Kennedy was Executive Vice President and Chief Financial Officer of Forest Oil Corporation (“Forest”) from 2009 to 2013. From 2001 until 2009, Mr. Kennedy held various financial positions of increasing responsibility within Forest. From 1996 to 2001, Mr. Kennedy was an auditor with Arthur Andersen focusing on the Natural Resources industry. Mr. Kennedy holds a B.S. in Accounting from the University of Colorado at Boulder.
W. Patrick AshYvette K. Schultz has served as Antero’s Chief Compliance Officer and Senior Vice President – Reserves, Planning & Midstream,of Legal since June 2019, prior to which heJanuary 2022, and as Antero’s General Counsel since January 2017. Ms. Schultz has also served as Vice PresidentAntero’s Corporate Secretary since April 2021. Ms. Schultz was previously Antero’s Director of Reservoir Engineering and Planning beginning in DecemberLegal from 2015 to 2017. Prior to joining us, Mr. AshAntero, Ms. Schultz was an attorney at Ultra Petroleum Corp. (“Ultra”) for six years in management positions of increasing responsibility, most recently serving as Vice President, Development, including duringVinson & Elkins L.L.P. from 2008 to 2012 and after Ultra’s bankruptcy proceedings in 2016,at Latham & Watkins LLP from which it emerged in 2017. In this position he led the reservoir engineering, geoscience, and corporate engineering groups. From 20012012 to 2011, Mr. Ash served in engineering roles at Devon Energy Corporation, NFR Energy LLC and Encana Corporation. Mr. Ash2015. Ms. Schultz holds a B.S. in Petroleum EngineeringComputer Science and Masters degree in Business Administration from Texas A&Mthe University of South Dakota. She also holds a J.D. and a M.B.A.B.C.L. from Washington University in St. Louis.the Paul M. Hebert Law Center at Louisiana State University.
| - |
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Antero’s sound governance practices and policies provide an important framework to assist the Board in fulfilling its duties to stockholders. Antero’sThe Corporate Governance Guidelines include provisions concerning the following:
| • | qualifications, independence, responsibilities, tenure, and compensation of directors; |
| • | background (including skills, experience and viewpoint) and diversity (including race, gender, national origin, religion and sexual orientation or identity) of directors, pursuant to Antero’s Diversity and Inclusion Policy; |
| • | service on other boards; |
| • | director resignation process; |
| • | role of the Chairman of the Board and the Lead Director; |
| • | meetings of the Board and |
| • | interaction |
| • | annual performance reviews of the Board; |
| • | director orientation and continuing education; |
| • | attendance at meetings of the Board and the Annual Meeting; |
| • | stockholder communications with directors; |
| • | committee functions, |
| • | director access to independent advisors and management; and |
| • | management evaluation and succession planning. |
The Corporate Governance Guidelines are available on Antero’s website at www.anteroresources.com in the “Governance” subsection of the “Investors” section. The Nominating & Governance Committee reviews the Corporate Governance Guidelines periodically and as necessary, and any proposed additions to or amendments of the Corporate Governance Guidelines are presented to the Board for its approval.
Director Independence
Rather than adopting categorical standards, the Board assesses director independence on a case-by-case basis, in each case consistent with applicable legal requirements and the listing standards of the New York Stock Exchange (NYSE). After reviewing all relationships each director has with Antero, including the nature and extent of any business relationships, as well as any significant charitable contributions Antero makesmade to organizations where its directors serve as board members or executive officers, the Board has affirmatively determined that none of the following directors have no material relationships with Antero and all of them are independent as defined by NYSE listing standards: Messrs. Clark, Hardesty, Keenan, Korus, Tyree and Mmes. Mutschler and Sutil. Neitherstandards except Mr. Rady, Antero’s Chief Executive Officer nor Mr. Warren, Antero’s President and Chief Financial Officer, is considered by the Board to be an independent director.President.
Director Independence
|
7of 8
Directors are Independent
Antero does not have a formal policy addressing whether the roles of Chairman of the Board and Chief Executive Officer should be separate or combined. The directors serving on the Board have considerable professional and industry experience, significant experience as directors of both public and private companies, and a unique knowledgeunderstanding of the challenges and opportunities Antero faces. Accordingly, the Board believes it is in the best position to evaluate Antero’s needs and to determine how best to organize Antero’sits leadership structure to meet those needs at any given time.
| - 2023 Proxy Statement | 21 |
At present, the Board has chosen to combine the positions of Chairman and Chief Executive Officer. The Board believes the current Chief Executive Officer is the individual with the necessary experience, commitment, and support of the other members of the Board to effectively carry out the role of Chairman. Mr. Rady brings valuable insight to the Board due to the perspective and experience he brings bothhas gained as our Chief Executive Officer and as one of our founders. As the principal executive officer since our inception, Mr. Rady has unparalleled knowledge of our business and operations. As a significant stockholder, Mr. Rady is invested in our long-term success. In addition, the Board believes that combining the roles of Chairman and Chief Executive Officer at the present time promotes strong alignment of strategic development and execution, effective implementation of strategic initiatives, and clear accountability for Antero’s success or failure. Moreover, becausesuccess. Because seven of the nineeight directors are independent under NYSE rules, the Board believes this leadership structure does not impede independent oversight of Antero.
The Nominating & Governance Committee reviews this leadership structure every year. The Board believes it is important to retain the flexibility to determine whether the roles of Chairman and Chief Executive Officer should be separated or combined.
Election of Lead Director
To facilitate candid discussion among Antero’s directors, the non-management directors meet regularly in executive sessions.
The Corporate Governance Guidelines permit the Board, on the recommendation of the Nominating & Governance Committee, to choose a Lead Director to preside at these executive sessions. As theThe Lead Director, Directors responsibilities include:
BOARD LEADERSHIP • Presiding over the non-management executive session held at each Board meeting • Calling meetings of the independent directors, as needed • Conferring with the committee chairs and the Chairman, where appropriate, on agenda planning to ensure coverage of key strategic issues • Ensuring the Board’s ability to periodically review and provide input on and monitor management’s execution of the company’s long-term strategy • Serving as the independent directors’ representative in crisis situations • Acting as a key advisor to the CEO on a wide variety of company matters • Being authorized, in consultation with the Board, to retain independent advisors • Engaging directly with key members of the leadership team | BOARD CULTURE • Serving as liaison between the Chairman and the independent directors • Facilitating discussion among the independent directors on key issues and concerns • Ensuring Board discussions demonstrate constructive questioning of management • Promoting teamwork and communication among the independent directors • Fostering an environment that allows for engagement and commitment of Board members | |
BOARD MEETINGS • Presiding at all meetings or executive sessions of the Board at which the Chairman is not present | ||
PERFORMANCE AND DEVELOPMENT • Leading, in conjunction with the Compensation Committee, the annual performance assessment of the CEO • Facilitating the Board’s engagement with the CEO and CEO succession planning • Leading the Board’s annual self-assessment and recommendations for improvement, if any | SHAREHOLDER ENGAGEMENT • Ensuring that he or she is available for direct engagement on matters related to Board governance and oversight, if requested by major shareholders • Ensuring appropriate board oversight of key stakeholder and investor engagement and disclosures | |
Mr. Hardesty provides,has served in conjunction with the Chairman, leadership and guidance to the Board. He also chairsthis role since 2019, chairing executive sessions of the non-management directors and establishesestablishing the agenda for these meetings. As the Lead Director, Mr. Hardesty joins the Chairman in providing leadership and guidance to the Board.
- 2023 Proxy Statement 22 How Director Nominees
areAre Selected
Before recommending to the Board that an existing director be nominated for reelection at the annual meeting of stockholders, the Nominating & Governance Committee will review and consider the director’s:
| • | past Board and committee meeting attendance and performance; |
| • | length of Board service; |
| • | personal and professional integrity, including commitment to Antero’s core values; |
| • | relevant experience, skills, qualifications and contributions to the Board; and |
| • | independence under applicable standards. |
|
Appointing new directorsThe Nominating & Governance Committee is responsible for assessing the appropriate balance of skills and filling vacanciescharacteristics required of Board members.
The Board believes that all directors should have sound business judgment, personal and professional integrity, an ability to work as part of a team, willingness to commit the required time to serve as a Board member, business experience, and financial literacy. The Nominating & Governance Committee considers diversity along with other factors when reviewing director candidates.
The Board created a detailed matrix to formalizeFor information regarding the process of selecting new directors. The matrix pinpoints:
As of the date hereof, the Board (which includes Mr. Warren and Mr. Korus) embodied a diverse set of experiences, qualifications, attributes, and skills as shown below (which amounts include Messrs. Warrenof the current members of our Board, please see “Proxy Summary—Summary of Director Qualifications and Korus):Experience.”
The Nominating & Governance Committee will treat informal recommendations for directors that are received from Antero’s stockholders in the same manner as recommendations received from any other source. The Nominating & Governance Committee and the Board will consider the benefits of all aspects of diversity, and will consider whether, and if so how, to identify new candidates for Board service and when identifying potential new Board members or filing a vacancy on the Board, commits to seeking out diverse candidates to the extent possible. Our Diversity and Inclusion Policy and our Nominating and Governance Committee Charter require that each pool of candidates to be considered to fill a vacancy on the Board shall include at least one individual who would be considered diverse based on traditional diversity concepts such as race, gender, national origin, religion, or sexual orientation or identity.
- 2023 Proxy Statement 23 Board’s Role in Risk Oversight
In the normal course of its business, Antero is exposed to a variety of risks, including market risks relating to changes in commodity prices, interest rate risks, technical risks affecting Antero’s resource base, political risks, and credit and investment risk. Our Board reviews these risks, among others, in relation to our business on a regular basis. At least annually, our Board also receives updates from management regarding information security, cyber security and data security risks in connection with Antero’s Enterprise Risk Management program. The Board and each committee has distinct responsibilities for monitoring other risks, as shown below.
| The Board of Directors | ||||
| The Board oversees Antero’s strategic direction. To that end, the Board considers the potential rewards and risks of Antero’s business opportunities and challenges, and it monitors the development and management of risks that impact our strategic goals. | ||||
Audit Committee The Audit Committee monitors the effectiveness of Antero’s systems of financial reporting, auditing and internal controls, as well as related legal and regulatory compliance matters. | Nominating & Governance Committee The Nominating & Governance Committee oversees the management of risks associated with Board organization, membership and structure; succession planning for our directors and executive officers; and corporate governance. | Compensation Committee The Compensation Committee oversees Antero’s compensation policies and practices. | Environmental, Social and Governance (ESG) Committee The Environmental, Social and Governance (ESG) Committee provides guidance to the Board on, and oversees Antero’s risk management policies related to the environment, including with respect to climate change, Antero’s health and safety program, and social and political trends, issues and concerns applicable to Antero’s business activities and performance. The ESG Committee regularly receives reports from management on pertinent ESG risks or opportunities, including climate related topics. | Conflicts Committee The Conflicts Committee assists the Board in investigating, reviewing and evaluating potential conflicts of interest, including those between Antero and Antero Midstream. |
The Board believes that a robust and constructive evaluation process is an essential component of Board effectiveness and good corporate governance. To that end, the Board, the Audit Committee, the Compensation Committee, the Nominating & Governance Committee and the ESG Committee each conduct an annual self-assessment to evaluate their performance, composition, and effectiveness, and to identify areas for improvement.
These evaluations take the form of wide-ranging and candid discussions. The Lead Director facilitates discussions evaluating the full Board, and the committee chairs facilitate discussions regarding their respective committees.
| - 2023 Proxy Statement | 24 |
Directors are elected by a plurality of votes cast in an uncontested election. The Corporate Governance Guidelines require that an incumbent director who fails to receive the required number ofmore votes for reelectioncast “for” than “withheld” must tender a resignation. The Nominating & Governance Committee will act on an expedited basis to determine whether to accept any such resignation, and will submit its recommendation for prompt consideration by the Board. The Board expects the director whose resignation is under consideration to abstain from participating in this decision. The Nominating & Governance Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
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In the normal course of its business, Antero is exposed to a variety of risks, including market risks relating to changes in commodity prices, interest rate risks, technical risks affecting Antero’s resource base, political risks, and credit and investment risk. At least annually, our Board receives updates from management regarding information security, cyber security and data security risks in connection with Antero’s Enterprise Risk Management program. The Board and each of its committees has distinct responsibilities for monitoring those risks, as shown below.
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Board and Committee Self-Evaluations
The Board believes that a robust and constructive evaluation process is an essential component of Board effectiveness and good corporate governance. To that end, the Board and each of its standing committees conducts an annual self-assessment to evaluate their performance, composition, and effectiveness, and to identify areas for improvement.
These evaluations take the form of wide-ranging and candid discussions. The Lead Director facilitates discussions evaluating the full Board, and the committee chairs facilitate discussions regarding their respective committees. The Board and committee evaluations occasionally lead to changes in practices or procedures.
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The Board held 118 meetings in 2020.2022. The then-serving outside directors held four4 executive sessions. No director attended fewer than 75% of the meetings of the Board and of the committees of the Board on which that director served during the respective periodtime he or she served.
Pursuant to Antero’s Corporate Governance Guidelines, directorsDirectors are encouraged to attend the Annual Meetings of Stockholders. All of the then-serving members of the Board attended the 20202022 Annual Meeting.
How to Contact the Board
Stockholders and other interested parties may communicate with us by writing to Antero Resources Corporation, 1615 Wynkoop Street, Denver, Colorado 80202. Stockholders may submit their thoughts to the Board, any committee of the Board, or individual directors on a confidential or anonymous basis by sending the communication in a sealed envelope marked “Stockholder Communication with Directors” and clearly identifying the intended recipient(s).
Antero’s Chief AdministrativeCompliance Officer and Corporate Secretary will review and forward each communication, as expeditiouslysoon as reasonably practicable, to the addressee(s) if: (1) the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication; and (2)if the communication falls within the scope of matters generally considered by the Board. To the extent the subject matter of a communication is appropriate and relates to matters that have been delegated by the Board to a committee other than the addressee(s) or to an executive officer, of Antero, the Chief AdministrativeCompliance Officer and Corporate Secretary also may forward the communication to the executiveapplicable officer or the chair of the applicable committee.committee chair.
Information regarding legal or compliance concerns may be submitted confidentially and anonymously, although Antero may be obligated by law to disclose the information or identity of the person providing the information in connection with government or private legal actions and in other circumstances.
Antero’s policy is not to take any adverse action, and not to tolerate any retaliation, against any person for asking questions or making good faith reports of possible violations of law, Antero’s policies or our Corporate Code of Business Conduct and Ethics.
| - 2023 Proxy Statement | 25 |
Antero’s Insider Trading Policy, which applies to Antero’sall employees, officers, and directors, prohibits hedging of Antero securities and engaging in any other transactions involving Antero-based derivative securities, regardless of whether the covered person is in possession of material, non-public information, except with regard toinformation. The policy does not affect the vesting of securities acquired pursuant to Antero’s incentive, retirement, stock purchase, or dividend reinvestment plans, or other transactions involving purchases and sales of company securities between a covered person and Antero. Antero’s Insider Trading Policy also prohibits purchasing Antero common stock on margin (e.g., borrowing money to fund the stock purchase) and pledging Antero securities.
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Available Governance Materials
The following materials are available on Antero’s website at www.anteroresources.com under “Investors” and then “Governance—Governance Documents.”
| • | Certificate of Incorporation of the Company; |
| • | Bylaws of the Company; |
| • | |
| • | |
| Corporate Code of Business Conduct and Ethics; | |
| • | Financial Code of Ethics; |
| • | Corporate Governance Guidelines; |
| • | Human, Labor and Indigenous Rights Policy; |
| • | Diversity and Inclusion Policy; |
| • | Supplier Code of Conduct; |
| • | Whistleblower Policy; and |
| • |
Stockholders may obtain a copy, free of charge, of any of these documents by sending a written request to Antero Resources Corporation, 1615 Wynkoop Street, Denver, Colorado, 80202. Any amendments to Antero’s Corporate Code of Business Conduct and Ethics will be posted in the “Governance” subsection of Antero’sour website.
- 2023 Proxy Statement 26 BOARD COMMITTEES
General
The Board had five standing committees in 2020:2022: the Audit Committee, the Compensation Committee, the Nominating & Governance Committee, the Conflicts Committee and the Environment, SustainabilityEnvironmental, Social and Social Governance (ESG) Committee. The charters of the Audit Committee, Compensation Committee, Nominating & Governance Committee and Environment, Sustainability and Social Governance (ESG) Committeeeach of these committees are available on Antero’s website at www.anteroresources.com in the “Governance—Governance Documents” subsection of the “Investors” section.
The Board creates ad hoc committees on an as-needed basis. There were no ad hoc committees in 2020.2022.
Audit Committee
Current Members*: Paul J. Korus (chair), Benjamin A. Hardesty, Jacqueline C. Mutschler, Thomas B. Tyree, Jr.
Number of meetings in 2020: 5
The Audit Committee oversees, reviews, acts on, and reports to the Board on various auditing
Current Members*: Brenda R. Schroer (chair) Jacqueline C. Mutschler Vicky Sutil* Thomas B. Tyree, Jr. Number of meetings in 2022: 8 | The Audit Committee oversees, reviews, acts on, and reports to the Board on various audit and accounting matters, including:
In addition, the Audit Committee oversees Antero’s compliance with legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters.
The Board has determined that all members of the Audit Committee meet the heightened independence standards applicable to audit committee members prescribed by rules of the NYSE and the Securities and Exchange Commission (“SEC”). In addition, the Board believes each of Ms. Schroer and Mr. Tyree is an “audit committee financial expert” as defined in SEC rules. |
| Benjamin A. Hardesty stepped down from the Audit Committee on May 20, 2022. Vicky Sutil joined the Audit Committee on May 20, 2022. |
Current Members*: Robert J. Clark (chair) Benjamin A. Hardesty* W. Howard Keenan Jr.* Number of meetings in 2022: 16 | The Compensation Committee establishes salaries, incentives and other forms of compensation for our executive officers. The Compensation Committee also administers Antero’s incentive compensation and benefit plans, and reviews and recommends to the Board for approval the compensation of our non-employee directors. The Board has determined that all members of the Compensation Committee meet the NYSE’s heightened requirements applicable to compensation committee members, and also meet the heightened independence requirements under SEC rules and the tax code. No Antero executive officer serves on the board of directors of a company that has an executive officer who serves on the Board. |
| * | Brenda R. Schroer and Vicky Sutil stepped down from the Compensation Committee on May 20, 2022. W. Howard Keenan Jr. and Benjamin A. Hardesty joined the Compensation Committee on May 20, 2022. |
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Rules implemented by the NYSE and the Securities and Exchange Commission (“SEC”) require Antero to have an audit committee composed of at least three directors who meet particular independence and experience standards. The Board has determined that all members of the Audit
Current Members*: Benjamin A. Hardesty (chair) Robert J. Clark W. Howard Keenan, Jr. Jacqueline C. Mutschler. Number of meetings in 2022: 4 | The Nominating & Governance Committee identifies, evaluates and recommends qualified nominees to serve on the Board, develops and oversees Antero’s internal corporate governance processes, and directs all matters relating to the succession of Antero’s Chief Executive Officer.
The Board has determined that all members of the Nominating & Governance Committee meet the NYSE’s independence standards. |
| * |
Current Members*: Robert J. Clark (chair), Paul J. Korus,Brenda R. Schroer, Vicky Sutil Thomas B. Tyree, Jr.
Number of meetings in 2020**: 11
The Compensation Committee establishes salaries, incentives and other forms of compensation for our executive officers. The Compensation Committee also administers Antero’s incentive compensation and benefit plans, and reviews and recommends to the Board for approval the compensation of our non-employee directors.
Rules implemented by the NYSE require Antero to have a compensation committee composed of members who satisfy NYSE independence standards. All members of the Compensation Committee meet the NYSE’s independence standards, including the heightened requirements applicable to compensation committee members, and also meet the heightened independence requirements under SEC rules and the tax code. No Antero executive officer serves on the board of directors of a company that has an executive officer who serves on the Board.
Nominating & Governance Committee
Current Members*: Benjamin A. Hardesty (chair), Robert J. Clark, W. Howard Keenan, Jr., Paul J. Korus, Jacqueline C. Mutschler, Vicky Sutil, Thomas B. Tyree, Jr.
Number of meetings in 2020**: 6
The Nominating & Governance Committee identifies, evaluates and recommends qualified nominees to serve on the Board, develops and oversees Antero’s internal corporate governance processes, and directs all matters relating to the succession of Antero’s Chief Executive Officer.
Rules implemented by the NYSE require Antero to have a nominating & governance committee composed entirely of independent directors. All members of the Nominating & Governance Committee meet the NYSE’s independence standards.
Current Members: Robert J. Clark (chair) Jacqueline C. Mutschler Thomas B. Tyree, Jr. Number of meetings in 2022: None | The Conflicts Committee assists the Board in investigating, reviewing and |
Current Members*: Vicky Sutil (chair) Benjamin A. Hardesty Jacqueline C. Mutschler Brenda R. Schroer* Thomas B. Tyree, Jr.* Number of meetings in 2022: 4 | The Environmental, Social and Governance (ESG) Committee provides guidance to the Board on, and oversees Antero’s risk management policies related to the environment, including with respect to climate change, Antero’s health and safety program, and social and political trends, issues and concerns applicable to Antero’s business activities and performance. The ESG Committee also advises the Board and management on significant public policy issues that are pertinent to the Company and its stakeholders. Members of the ESG Committee have expertise in areas relating to ESG, including environmental stewardship, social responsibility and community relations. Vicky Sutil, the ESG Committee Chair, brings ESG Experience from her time on the | |
Current Members*: Robert J. Clark (chair), Paul J. Korus, Jacqueline C. Mutschler, Thomas B. Tyree, Jr.
Number of meetings in 2020: None
The Conflicts Committee assists the Board in investigating, reviewing and evaluating certain potential conflicts of interest, including those between Antero and Antero Midstream, and carries out any other duties delegated by the Board that relate to potential conflict matters.directors of the West Virginia Chamber of Commerce.
During 2022, the ESG Committee reviewed, and Antero published, its 2021 ESG Report, which is available at https://www.anteroresources.com/community-sustainability.
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Vicky Sutil (chair), Robert J. Clark, Benjamin A. Hardesty, Jacqueline C. Mutschler
Number of meetings in 2020*: 3
The Environment, Sustainability and Social Governance (ESG) Committee provides guidance to the Board on, and oversees Antero’s risk management policies related to corporate citizenship, environmental sustainability, and social and political trends, issues and concerns, and advises the Board and management on significant public policy issues that are pertinent to the Company and its stakeholders.
During 2020, the Environment, Sustainability and Social Governance (ESG) Committee reviewed the Company’s ESG practices and procedures.
Following such review, the Company published its 2020 Corporate Sustainability Report, which is available at https://www.anteroresources.com/ community-sustainability, and the Company adopted a Diversity and Inclusion Policy, a Supplier Code of Business Conduct and Ethics and a Human, Labor and Indigenous Rights Policy, all of which are available at https://www.anteroresources.com/investors/ corporate-governance/governance-documents. The Environment, Sustainability and Social Governance (ESG) Committee will continue to advise the Board on ESG matters.
General
Our non-employee directors are entitled to receive compensation consisting of retainers, fees and equity awards as described below. The Compensation Committee reviews non-employee director compensation on a periodic basisperiodically and recommends itchanges, if appropriate, to the Board for approval.
Our employee directors Messrs. Rady and Warren, do not receive additional compensation for their services as directors. All compensation that Messrs. Rady and Warren received from Antero as employees is disclosed in the Summary Compensation Table.Table on page 54.
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TheEffective April 15, 2022, some of the annual retainers payable to non-employee directors receivedof the following cashBoard were increased slightly, as indicated below. These modifications were made to ensure that our director compensation for their services during the 2020 fiscal year, prorated for a partial year of service:is competitive with that paid by our peers so that we can attract and retain qualified individuals to serve on our Board.
| Recipient | Amount | |||
| Non-employee director | $ | 70,000 | ||
| Lead Director | $ | 25,000 | ||
| Audit Committee: | ||||
| Chairperson | $ | 20,000 | ||
| Other members | $ | 7,500 | ||
| Compensation Committee: | ||||
| Chairperson | $ | 15,000 | ||
| Other members | $ | 5,000 | ||
| Nominating & Governance Committee: | ||||
| Chairperson | $ | 15,000 | ||
| Other members | $ | 5,000 | ||
| Conflicts Committee: | ||||
| Chairperson | $ | 5,000 | ||
| Other members | $ | 5,000 | ||
| Environment, Sustainability & Social Governance (ESG) Committee: | ||||
| Chairperson | $ | 15,000 | ||
| Other members | $ | 5,000 | ||
| Recipient | Amount | |||
| Non-employee director | $ | 80,000 | ||
| (previously $70,000) | ||||
| Lead Director | $ | 25,000 | ||
| Audit Committee: | ||||
| Chairperson | $ | 24,000 | ||
| (previously $20,000) | ||||
| Other members | $ | 10,000 | ||
| (previously $7,500) | ||||
| Compensation, Nominating & Governance, and ESG Committees: | ||||
| Chairperson | $ | 15,000 | ||
| Other members | $ | 7,500 | ||
| (previously $5,000) | ||||
| Conflicts Committee: | ||||
| Chairperson | $ | 5,000 | ||
| Other members | $ | 5,000 |
All retainers are paid in cash on a quarterly basis in arrears, but directors have the option to elect, on an annual basis, to receive all or a portion of their cash retainers in the form of shares of our common stock. For 2020,
Effective April 15, 2023, the annual retainer for non-employee directors who are members of committees ofwill be increased from $80,000 to $100,000 and the Board were eligibleadditional annual retainers for (i) Lead Director will be increased from $25,000 to receive meeting fees of $1,500 for each committee meeting attended in excess of ten meetings for such committee per calendar year (up to a maximum of $22,500 per committee). Directors are also reimbursed for reasonable expenses incurred (i) to attend meetings and activities of the Board or its committees,$40,000 and (ii) Compensation Committee chair will be increased from $15,000 to facilitate participation$20,000. Otherwise, the cash compensation of our non-employee directors in general education and orientation programs2023 will be the same as that described for directors.2022.
- 2023 Proxy Statement 29 Equity-Based Compensation
and Stock Ownership Guidelines
In addition to cash compensation, our non-employee directors receive annual equity-based compensation consisting of fully-vested stock with an aggregate grant date value equal to $200,000, subject to the terms and conditions of the Antero Resources Corporation 2020 Long-Term Incentive Plan (“AR LTIP”) and the award agreements pursuant to which such awards are granted. These awards are granted in arrears on a quarterly basis, such thatso each grantinstallment has a grant date fair value of approximately $50,000. In lightEffective April 15, 2023, the annual equity-based compensation for non-employee directors will be increased from an aggregate grant date value of market conditions,$200,000 to $215,000.
For 2022, the directors who are members of Board committees were eligible to receive a fee of $1,500 for each committee meeting attended in excess of ten meetings for such committee per calendar year (up to a maximum of $22,500 per committee). Directors are also reimbursed for reasonable expenses incurred to attend meetings and activities of the Board did not grant any stock-based compensationor its committees, and to attend and participate in general education and orientation programs for the first quarter of 2020.directors.
Under our stock ownership guidelines, eachwithin five years of ourbeing elected or appointed to the Board, a non-employee directorsdirector is required to own shares of our common stock with a fair market value equal to at least five times the amount of theirthe annual cash retainer within five years of being appointed to the Board.retainer. These stock ownership guidelines are designed to align our directors’ interests more closely with those of our stockholders. All of the directors who are subject to this requirement and who have been on the Board for at least five years are in compliance with the ownership guidelines. For information regarding stock ownership guidelines applicable to our executive officers, please see “Compensation Discussion and Analysis—Other Matters—Stock Ownership Guidelines.”
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Total2022 Non-Employee Director Compensation
The following table provides information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2020.2022.
| Fees Earned | ||||||||||||
| or Paid in Cash | Stock Awards | Total | ||||||||||
| Name | ($)(1) | ($)(2) | ($) | |||||||||
| Robert J. Clark | 98,750 | 150,001 | 248,751 | |||||||||
| Benjamin A. Hardesty | 117,500 | 150,001 | 267,501 | |||||||||
| W. Howard Keenan, Jr. | 75,000 | 150,001 | 225,001 | |||||||||
| Paul J. Korus(3) | 102,500 | 150,001 | 252,501 | |||||||||
| Vicky Sutil | 91,250 | 146,739 | 237,989 | |||||||||
| Thomas B. Tyree, Jr. | 87,500 | 146,739 | 234,239 | |||||||||
| Jacqueline C. Mutschler(3) | 83,125 | 100,101 | 183,126 | |||||||||
| Joyce E. McConnell(3) | 18,750 | 50,000 | 68,750 | |||||||||
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | |||
| Robert J. Clark | 104,375 | 199,921 | 304,296 | |||
| Benjamin A. Hardesty | 134,375 | 199,921 | 334,296 | |||
| W. Howard Keenan, Jr. | 90,000 | 199,921 | 289,921 | |||
| Jacqueline C. Mutschler | 105,625 | 199,921 | 305,546 | |||
| Brenda R. Schroer | 112,375 | 199,921 | 312,296 | |||
| Vicky Sutil | 106,250 | 199,921 | 306,171 | |||
| Thomas B. Tyree, Jr. | 100,625 | 199,921 | 300,546 |
| (1) | Includes annual cash retainer, committee fees, committee chair fees and meeting fees earned |
| (2) | Amounts in this column reflect the aggregate grant date fair value of shares granted under the AR LTIP to each non-employee director during fiscal year |
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The Audit Committee of the Board has selected KPMG LLP as Antero’s independent registered public accounting firm for the year ending December 31, 2021.2023. KPMG LLP has audited Antero’s and its predecessor’s financial statements since 2003. The Audit Committee annually evaluates the accounting firm’s qualifications to continue to serve Antero. In evaluating the accounting firm, the Audit Committee considers the reputation of the firm and the local office, the industry experience of the engagement partner and the engagement team, and the experience of the engagement team with clients of similar size, scope and complexity as Antero. The Audit Committee is directly involved in the selection of the new engagement partner when rotation is required every five years in accordance with SEC rules. KPMG LLP completed the audit of Antero’s annual consolidated financial statements for the year ended December 31, 2020,2022, on February 17, 2021.15, 2023.
The Board is submitting the selection of KPMG LLP for ratification at the Annual Meeting. The submission of this matter for ratification by stockholders is not legally required, but the Board and the Audit Committee believe the ratification proposal provides an opportunity for stockholders to communicate their views about an important aspect of corporate governance. If our stockholders do not ratify the selection of KPMG LLP, the Audit Committee will reconsider, but will not be required to rescind, the selection of that firm as Antero’s independent registered public accounting firm.
Representatives of KPMG LLP are expected to be present at the Annual Meeting. They will have the opportunity to make a statement, and are expected to be available to respond to appropriate questions.
The Audit Committee has the authority and responsibility to retain, evaluate and replace Antero’s independent registered public accounting firm. Stockholder ratification of the appointment of KPMG LLP does not limit the authority of the Audit Committee to change Antero’s independent registered public accounting firm at any time.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS ANTERO’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021.
 | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP AS ANTERO’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2023. |
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AUDIT MATTERS
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language in such filing.
Audit Committee Report
Pursuant to its charter, the Audit Committee’s principal functions include: (i) overseeing the accounting and financial reporting process of Antero and audits of Antero’s financial statements (ii) the appointment, compensation, retention and oversight of the work of the independent auditors hired for the purpose of issuing an audit report or performing other audit, review or attest services for Antero; (iii) pre-approving audit or non-audit services proposed to be rendered by Antero’s independent registered public accounting firm; (iv) annually reviewing the qualifications and independence of the independent registered public accounting firm’s engagement partner and other senior personnel who are providing services to Antero; (v) overseeing Antero’s internal auditor and reviewing the internal auditor’s reports and annual internal audit plan; (vi) reviewing with management and the independent registered public accounting firm Antero’s annual and quarterly financial statements, earnings press releases, and financial information and earnings guidance provided to analysts and ratings agencies; (vi)(vii) approving or ratifying certain related party transactions as set forth in Antero’s Related Persons Transactions Policy; (vii)(viii) reviewing with management Antero’s major financial risk exposures; (viii)(ix) assisting the Board in monitoring compliance with legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters; (ix)(x) preparing the report of the Audit Committee for inclusion in Antero’s proxy statement; and (x)(xi) annually reviewing and reassessing its performance and the adequacy of its charter.
While the Audit Committee has the responsibilities and powers set forth in its charter, and Antero’s management and the independent registered public accounting firm are accountable to the Audit Committee, it is not the duty of the Audit Committee to plan or conduct audits or to determine that Antero’s financial statements and disclosures are complete and accurate and in accordance with generally accepted accounting principles and applicable laws, rules and regulations.
In performing its oversight role, the Audit Committee has reviewed and discussed Antero’s audited financial statements with management and the independent registered public accounting firm.
The Audit Committee also has discussed with the independent registered public accounting firm the matters required to be discussed by the applicable standards and regulations of the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee has received the written disclosures and the written statement from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee also has considered whether the provision of non-audit services by the independent registered public accounting firm to Antero is compatible with maintaining the firm’s independence, and has discussed with the independent registered public accounting firm its independence.
Based on the reviews and discussions described in this Audit Committee Report, and subject to the limitations on the roles and responsibilities of the Audit Committee referred to herein and in its charter, the Audit Committee recommended to the Board that Antero’s audited financial statements for the year ended December 31, 2020,2022, be included in the Form 10-K, which was filed with the SEC on February 17, 2021.15, 2023.
Members of the Audit Committee*:
Paul J. KorusBrenda R. Schroer (Chairman)
Benjamin A. Hardesty
Jacqueline C. Mutschler
Vicky Sutil
Thomas B. Tyree, Jr.
| * | Includes all members of the Audit Committee as of the time the Audit Committee Report was approved for inclusion in this Proxy Statement. |
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Audit and Other Fees
The table below sets forth the aggregate fees and expenses billed by KPMG LLP for the last two fiscal years to Antero (in thousands):
| For the Years Ended December 31 | ||||||||
| 2019 | 2020 | |||||||
| Audit Fees(1) | ||||||||
| Audit and Quarterly Reviews | $ | 1,495 | $ | 1,735 | ||||
| Other Filings | — | — | ||||||
| SUBTOTAL | 1,495 | 1,735 | ||||||
| Audit-Related Fees(2) | 100 | 455 | ||||||
| Tax Fees | — | — | ||||||
| All Other Fees | — | — | ||||||
| TOTAL | $ | 1,595 | $ | 2,190 | ||||
| For the Years Ended December 31 | ||||||||
| 2021 | 2022 | |||||||
| Audit Fees(1) | ||||||||
| Audit and Quarterly Reviews | $ | 1,670 | $ | 1,609 | ||||
| Other Filings | — | — | ||||||
| SUBTOTAL | 1,670 | 1,609 | ||||||
| Audit-Related Fees(2) | 135 | — | ||||||
| Tax Fees | — | — | ||||||
| All Other Fees | — | — | ||||||
| TOTAL | $ | 1,805 | $ | 1,609 | ||||
| (1) | Includes the audit of Antero’s annual consolidated financial statements included in the Annual Report on Form 10-K and internal controls over financial reporting and review of Antero’s quarterly financial statements included in Quarterly Reports on Form 10-Q. |
| (2) | Represents fees related to Antero Resources’ other |
The charter of the Audit Committee and its pre-approval policy require the Audit Committee to review and pre-approve the independent registered public accounting firm’s fees for audit, audit-related, tax and other services. The Chairman of the Audit Committee has the authority to grant pre-approvals up to a certain limit, provided such approvals are within the pre-approval policy and are ratified by the Audit Committee at a subsequent meeting. For the year ended December 31, 2020,2022, the Audit Committee approved all of the services described above.
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Our policies are conceived with the intention of attracting and retaining highly qualified individuals capable of contributing to the creation of value for our stockholders. Our compensation program for 20202022 was designed to be competitive with market practices and to align the interests of our Named Executive Officers with those of Antero and its stockholders.
Stockholders are urged to read the Compensation Discussion and Analysis section of this Proxy Statement, which discusses how our compensation design and practices reflect our compensation philosophy for calendar year 2020.2022. The Compensation Committee and the Board believe that our compensation practices for 20202022 were effective in implementing our guiding principles.
Pursuant to Section 14A of the Exchange Act, we are submitting this annual proposal to our stockholders for an advisory vote to approve the compensation of our Named Executive Officers. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their views on the compensation of our Named Executive Officers for 2020.2022. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers for 20202022 and the principles, policies and practices described in this Proxy Statement. Accordingly, the following resolution is submitted for stockholder vote at the Annual Meeting:
“RESOLVED, that the stockholders of Antero Resources Corporation approve, on an advisory basis, the compensation of its named executive officers during 20202022 as disclosed in the proxy statement for the 20212023 Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and other related tables and disclosures.”
As this is an advisory vote, the result is not likely to affect previously granted compensation. The Compensation Committee will consider the outcome of the vote when evaluating our compensation practices going forward.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.
| THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT. |
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides details on the following matters:
| • | Our |
| • | Our |
| • | Material actions taken with respect to our |
| • | Pertinent executive compensation policies. |
2022 Named Executive Officers
The table below sets forth the name and principal position of each of our 20202022 Named Executive Officers. Effective April 30, 2021, Glen C. Warren, Jr. will retire as President, Chief Financial Officer and Secretary of Antero Resources and President and Secretary of Antero Midstream. Mr. Warren will also step down from the board of directors of both companies as of the same date. Effective upon Mr. Warren’s retirement, (i) Paul M. Rady, currently Chairman and Chief Executive Officer of Antero Resources and Antero Midstream, will also be named President of Antero Resources and Antero Midstream and (ii) Michael N. Kennedy, currently Senior Vice President of Finance at Antero Resources and Antero Midstream and Chief Financial Officer of Antero Midstream, will be named Chief Financial Officer of Antero Resources, will cease to be the Chief Financial Officer of Antero Midstream and will continue to serve as Senior Vice President of Finance of Antero Midstream and Senior Vice President of Finance of Antero Resources. Also effective upon Mr. Warren’s retirement, Mr. Kennedy will be appointed to the Antero Midstream Board.
| Name | Principal Position |
| Paul M. Rady | Chairman of the Board, |
| Senior Vice President—Finance | |
| W. Patrick Ash | Senior Vice President—Reserves, Planning and Midstream |
| Yvette K. Schultz | Chief Compliance Officer, Senior Vice President—Legal, General Counsel and Corporate Secretary |
2022 Say-on-Pay and Say-on-Frequency Advisory
VoteVotes
At the Company’s 20202022 annual meeting, our stockholders were asked to approve, on an advisory basis, the compensation of the Named Executive Officers. Advisory votes in favor of our executive compensation program were cast by approximately 97%98% of the shares of common stock counted as present and entitled to vote at such meeting.
The Compensation Committee considered the results of the “Say on Pay”“Say-on-Pay” vote when evaluating the compensation of the Named Executive Officers in 2020.2022. We have continued, and plan to continue, seeking to engage in stockholder outreach regarding executive compensation programs.
At the Company’s 2022 annual meeting, our stockholders were also asked to approve, on an advisory basis, the frequency with which the Company will submit future “Say-on-Pay” votes to our stockholders. The Board recommended that the Say-on-Pay vote be held annually and that frequency received far more votes than the alternatives (every two years and every three years). As a result, the Company will continue to hold annual Say-on-Pay advisory votes.
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Since our inception, our compensation philosophy has been predominantly focused on recruiting individuals who are motivated to help us achieve superior performance and growth. Our company was founded by entrepreneurs whose strategy was to employ high-impact executives who are extremely
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effective at sparking superior performance with low overhead. These highly qualified and experienced individuals have contributed to the continued success of our Company. As a result of certain of our Named Executive Officers being founders of the Company and our historical emphasis on long-term equity-based compensation, as of April 22, 2021,10, 2023, our Named Executive Officers hold approximately 9.4%5.6% of our outstanding shares, which ensures they identify with the best interests of our stockholders.
We seek to attract, retain, and motivate exceptional executive talent by providing our executives with a competitive mix of fixed, time-based and performance-based compensation. Our performance-based compensation program focuses on motivating returns and value creation per share, disciplined capital investment, efficient operations, and generation of distributable cash flow. We believe our compensation philosophy and practices for 20202022 promote a strong alignment between Named Executive Officer pay and Company performance, while providing our Compensation Committee with the flexibility necessary to ensure that compensation was appropriate for this anomalous year.performance.
Compensation Best Practices
Our Compensation Committee is committed to maintaining compensation best practices and employing methods that motivate our executives create long-term value while minimizing risk to investors. The following table highlights the compensation best practices we followed during 20202022 with respect to our Named Executive Officers:
| What We Do | |
 | Use a representative and relevant peer group |
 | Target reasonable compensation levels relative to peers with a focus on performance-based, at-risk components |
| Enforce robust minimum stock ownership guidelines |
| Evaluate the risk of our compensation programs |
| Include performance based long-term incentives |
| Use and review compensation tally sheets |
| Engage an independent compensation consultant |
| Maintain a clawback policy |
| What We Don’t Do | |
  | No tax gross ups for executive officers |
  | No excessive perquisites |
| No severance arrangements for Named Executive Officers |
| No guaranteed bonuses for Named Executive Officers |
| No management contracts |
| No granting stock options with an exercise price less than the fair market value of the Company’s common stock on the date of grant outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) |
| No reduction of the exercise price of an outstanding stock option without stockholder approval outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) |
| No hedging or pledging of Company stock |
| No separate benefit plans for Named Executive Officers |
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The Compensation Committee oversees all elements of our executive compensation program and has the final decision-making authority on all executive compensation matters. Each year, the Compensation Committee reviews, modifies (if necessary), and approves our peer group, the goals and objectives relevant to the compensation of the Chief Executive Officer and the otherall Named Executive Officers, as well as the executive compensation program as a whole, including performance goals for the annual cash incentive program, if applicable, and long-term equity awards. In addition, the Compensation Committee is responsible for reviewing the performance of the Chief Executive
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Officer and the Company’s President, Chief Financial Officer and Secretary (“President/CFO”) within the framework of our executive compensation goals and objectives. Based on this evaluation, theThe Compensation Committee setsalso evaluates the compensationperformance of the other Named Executive Officers in consultation with our Chief Executive Officer and Chief Financial Officer. These evaluations are taken into account when setting the President/CFO.compensation for our named Executive Officers.
Actual compensation decisions for individual officers are the result of a subjective analysis of a number of factors, including the individual officer’s role within our organization, performance, experience, skills or tenure with us, changes to the individual’s position, and relevant trends in compensation practices.
The Compensation Committee also considers a Named Executive Officer’s current and prior aggregate compensation when setting future compensation. The Compensation Committee determines whether adjustments to compensation are necessary to adopt emerging best practices, reflect Company performance, retain each executive or provide additional or different performance incentives. Thus, the Compensation Committee’s decisions regarding compensation are the result of the exercise of judgment based on all reasonably available information.
Our Named Executive Officers provide services to us and to Antero Midstream Corporation (including its consolidated subsidiaries, as applicable, “Antero Midstream”). As a result, our Compensation Committee holds portions of its meetings jointly with the compensation committee of the Antero Midstream Board (the “AM Compensation Committee”). During these joint meetings in Spring 2020,Midstream. In 2022, the Compensation Committee and the AMAntero Midstream Compensation Committee (the “AM Compensation Committee”) each separately discussed and established eachits Named Executive Officer’s aggregate total cash compensation and then approved an aggregate total 2022 base salary and 2022 target bonus for services providedour Named Executive Officers provide to both companies, includingAntero and Antero Midstream. Cash compensation included base salary aggregate total targetand annual cash incentive value,incentives in 2022. We pay all elements of cash compensation to, and aggregate total target long-term incentive value. Performance metricsprovide all benefits for, each company’s annual cash incentive program, if applicable, andour Named Executive Officers. Antero Midstream reimburses us for a portion of base salaries paid to our Named Executive Officers based on the terms and provisions of all long-term incentive awards granted by each company are established separately by each of our Compensation Committee and the AM Compensation Committee.
The percentage of all non-compensation general and administrative expenses reimbursedattributable to us by Antero Midstream iseach company and calculated quarterly based on gross property and equipment, capital expenditure and labor costs, the last of which is calculated based on an estimate of how much time our employees spend providing services to Antero Midstream, in the aggregate, during each quarter (the “Reimbursement Percentage”). We pay all elements of cash compensation to, and provide all benefitsAntero Midstream reimbursed us for our Named Executive Officers. Thea portion of eachour Named Executive Officer’s base salary that was reimbursed by Antero Midstream for 2020 was calculated using the average Reimbursement Percentageequaled 27.5% for each of the four quarters in 2020, which was 27.25%2022 (the “2020“2022 NEO AM Reimbursement Percentage”).
While our Compensation Committee remained in communication with the AM Compensation Committee regarding long-term incentive awards granted in 2020, each worked independently to determine the value appropriate for grant from each respective company. Our The Compensation Committee and the AM Compensation Committee then metestablished its own performance metrics for its annual cash incentive program, and Antero Midstream reimbursed us for all amounts paid pursuant to make sure the individual long-termAntero Midstream’s annual cash incentive awards combine to achieve an overall award level in line with each company’s compensation philosophy.program.
Antero Midstream also reimburses us for the portion of the cost of all health and welfare benefits, employer 401(k) contributions, and the limited perquisites we provide to our Named Executive Officers that are attributable to services provided to Antero Midstream. This amount is calculated as the product of the total cost of such benefits and the 20202022 NEO AM Reimbursement Percentage.
The Compensation Committee established the value of the long-term incentive awards that we granted to our Named Executive Officers at a level compared to similarly situated executives in the peer
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group, reviewing the Company’s performance and in consultation with the Company’s independent compensation consultant. The Compensation Committee believes the value granted will motivate and reward longer-term strategy development and execution by the Company.
Consistent with the allocation of compensation expense for our Named Executive Officers described above, unless otherwise indicated, the information included in this Compensation Discussion and Analysis, as well as the tables that follow, only pertains to the compensation paid by us for services our Named Executive Officers provided to us in 2020.2022. For information regarding compensation paid to our Named Executive Officers for services provided to Antero Midstream in 2020,2022, please see the Proxy Statement filed by Antero Midstream on April 28, 2021.27, 2023.
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The Chief Executive Officer, and the President/ CFOtogether with our Chief Financial Officer, typically provide recommendations to the Compensation Committee and the AM Compensation Committee regarding the compensation levels for the other Named Executive Officers and for our executive compensation program as a whole. In making their recommendations, the Chief Executive Officer and the President/CFOChief Financial Officer, as applicable, consider each Named Executive Officer’s performance during the year, the Company’s performance during the year, compensation levels of similarly situated executives of companies with which we compete for executive talent, and independent oil and gas company compensation surveys. The Compensation Committee in joint discussion with the AM Compensation Committee, considers these recommendations when reviewing the performance of, and setting compensation for, the other executive officers.
The Compensation Committee has the authority to retain an independent executive compensation consultant. For 2020,2022, the Compensation Committee retained Frederic W. Cook & Co., Inc. (“F.W. Cook”).NFPCC. In compliance with the SEC and NYSE disclosure requirements, the Compensation Committee reviewed the independence of F.W. CookNFPCC under six independence factors. After its review, the Compensation Committee determined that F.W. CookNFPCC was independent.
In 2020, F.W. Cook:2022, NFPCC:
| • | Collected and reviewed all relevant Company information, including our historical compensation data and our organizational structure; |
| • | With input from management, |
| • | Assessed our compensation program’s position relative to market for our directors, Named Executive Officers and other vice presidents and relative to our stated compensation philosophy; |
| • | Prepared a report of its analysis, findings and recommendations for our executive and director compensation |
| • | Completed other ad hoc assignments, such as helping with the design of incentive arrangements. |
F.W. Cook’sNFPCC’s reports were provided to the Compensation Committee and the AM Compensation Committee in 2020 and also used by Messrs. Rady and WarrenKennedy in making their recommendations to the Compensation Committee and the AM Compensation Committee. In early 2021, the Compensation Committee engaged Longnecker & Associates (“Longnecker”) to replace F.W. Cook as its independent compensation consultant. Longnecker was involved in decisions related to the 2020 annual cash bonus as well as changes to the 2021 compensation programs.
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When assessing the soundness of our compensation programs, the Compensation Committee compares the pay practices for our Named Executive Officers against the pay practices of other companies. This process recognizes our philosophy that our compensation practices should be competitive, though marketplace information is only one of the many factors we consider.
Messrs. Rady and Warren,Kennedy, the Compensation Committee and the AR Compensation Committee used market compensation data provided by F.W. CookNFPCC to assess the total compensation levels of our Named Executive Officers relative to market. Market data is developed by comparing each executive officer’s compensation with that of similarly situated officers of companies in our Peer Group (described below) and of E&Poil and gas companies in general. In determining whether an officer is similarly situated, we consider the specific responsibilities assumed by our executives and executives at other organizations, and give greater weight to Peer Group data if a position appears comparable to the position of one of our Named Executive Officers. Otherwise, we supplement Peer Group data with industry data from the 20202022 Oil and Gas E&P Industry Compensation Survey prepared by Effective Compensation, Incorporated.
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F.W. CookNFPCC recommended, and after evaluation and discussion the Compensation Committee approved a peer group for use in determining compensation for 20202022 of onshore publicly traded oil and gas companies that are reasonably similar to us in terms of size and operations. The peer group was modified during 2020 to more closely reflect the Company’s currentWe believe these companies are properly aligned across financial metrics such as revenue, market capitalization.capitalization, and enterprise value, complexity and geography of operations. We refer to the following 17ten companies as the “Peer Group”:
2019-20202022 APPROVED PEER GROUP
| Company | Ticker |
| CNX Resources Corporation | CNX |
| Continental Resources, | CLR |
| Devon Energy Corporation | DVN |
| Diamondback Energy Inc. | FANG |
| EQT Corporation | EQT |
| Range Resources Corporation | RRC |
| Southwestern Energy Company | SWN |
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While we generallyIn determining compensation for 2022, the Compensation Committee determined that it was appropriate to target the median75th percentile of the Peer Group for eachbase salaries, target annual cash incentive awards, and long-term equity-based incentive awards. This increase in target compensation element for ourfrom the 50th percentile to the 75th percentile of the Peer Group was made after consultation with NFPCC and after a review of individual Named Executive Officers, in 2020, theOfficer and Company performance. The Compensation Committee weighedfeels that this data less heavily, instead focusing on the most effective wayincrease in targeted compensation was not only appropriate but important to retain, appropriately reward, and motivate our Named Executive Officersworld-class executive team, particularly in light of:
| • | the Company’s stock price performance; and |
| • | an increasingly competitive talent market. |
In additon, key operating metrics were considered as part of the decision to successfully navigate the unique challenges posed by the COVID-19 pandemicadjust target compensation:
| • | Net cash provided by operating activities increased by $925 million, or 126%, from $736 million in 2020 to $1.7 billion in 2021; and |
| • | Long-term debt decreased by $876 million, or 29%, from $3.0 billion in 2020 to $2.1 billion in 2021. |
As noted throughout this Compensation Discussion and depressed oil and gas prices. This approach resulted in someAnalysis, targeted compensation elements that were significantly above and some that were significantly below the median of our Peer Group in 2020. It has always been the case that compensation paid by other members of our Peer Group islevels are only one of many factors considered by the Compensation Committee and the AR Compensation Committee when setting compensation levels for our Named Executive Officers.
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Elements of Direct Compensation
Our Named Executive Officers’ compensation for 20202022 included the key components described below.
| Pay Component | Form of Pay | How Amount is Determined | Objective | |||
| Base salary | Cash | Market-competitive amount that reflects the executive’s relative skills, responsibilities, experience and contributions | Provide a minimum, fixed level of cash compensation | |||
| Cash | Encourage short-term financial and operational performance that is aligned with our business strategy and will lead to long-term stockholder value | |||||
| Long-term incentive awards | Performance share units | Three-year | Encourage performance that delivers value to, and direct alignment with, stockholders through stock price appreciation | |||
Three-year Net Debt to EBITDAX multiple | Encourage minimizing debt relative to cash flow | |||||
| Restricted stock units | ||||||
| Provide an additional retention mechanism |
With respect to the compensation attributable to services provided to us by our Named Executive Officers, the components of our Named Executive Officers’ compensation for 2020,2022, calculated based on amounts reported for 20202022 in the Summary Compensation Table below, except that target annual incentive levels are used rather than actual 2022 annual incentive award levels, were distributed as follows:
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Base salaries are designed to provide a minimum, fixed level of cash compensation for services rendered during the year. In addition to providing a base salary that is competitive with salaries paid by other independent oil and gas exploration and production companies, the Compensation Committee, in discussion with the AM Compensation Committee also considers whether our pay levels appropriately align each Named Executive Officer’s base salary level relative to the base salary levels of our other officers. Our objective is to have base salaries that accurately reflect each officer’s relative skills, experience and contributions to the Company. To that end, annual base salary adjustments are based on a subjective analysis of many individual factors, including:
| • | the responsibilities of the officer; |
| • | the period over which the officer has performed those responsibilities; |
| • | the scope of, and level of expertise and experience required for, the officer’s position; |
| • | the strategic impact of the officer’s position; and |
| • | the potential future contribution and demonstrated individual performance of the officer. |
In addition to the individual factors listed above, the Compensation Committee, in discussion with the AM Compensation Committee considers our overall business performance and implementation of Company objectives when determining annual
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base salaries. While these metrics generally provide context for making salary decisions, base salary decisions do not depend on attainment of specific goals or performance levels, and no specific weighting is given to one factor over another.
Base salaries are reviewed annually, but are not increased if the Compensation Committee, in discussion with the AM Compensation Committee believes that (1) our executives are currently compensated at proper levels in light of Company performance or external market factors, or (2) an increase or addition to other elements of compensation would be more appropriate in light of our stated objectives.
In March of 2022, the Compensation Committee approved the increase of base salary levels for each of the Named Executive Officers in an effort to generally align their base salary levels with the 75th percentile base salary levels for similarly situated executives at the Peer Group. The Compensation Committee decided to target the 75th percentile due to the fact that they believed that the Company’s management team is one of the best amongst its peers. The Compensation Committee looked to the 2021 TSR of 221% as one factor. In addition, key 2021 operating results were also considered, such as:
| • | Net cash provided by operating activities increased by $925 million, or 126%, from $736 million in 2020 to $1.7 billion in 2021; and |
| • | Long-term debt decreased by $876 million, or 29%, from $3.0 billion in 2020 to $2.1 billion in 2021. |
These factors show that management has a disciplined plan to lower long-term debt and to develop efficient operations to supply the capital needed to reduce the debt. The Compensation Committee believes that this approach is in the best interests of the shareholders and management should be compensated at the 75th percentile to recognize their role in increasing shareholder value. The Compensation Committee also took into account the other factors listed above when setting base salary levels for each of the Named Executive Officers. As a result, of external market factors, in February 2020, the Compensation Committee determined that no changes should be made to the Named Executive Officers’ base salaries for the 2020 fiscal year. Accordingly, each Named Executive Officer was paid the samefinal base salary in 2020 as he was paid in 2019. Messrs. Rady and Warren have not received an increase in base salary since 2017.levels may differ from the 75th percentile of peers.
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The table below reflects the portion of the base salary allocated to the Company in 2022 for each Named Executive Officer allocated to the Company.Officer. For additional information, see “Implementing Our Compensation Program Objectives—Role of the Antero Midstream Compensation Committee and Allocation of Compensation Expenses” above.
| Executive Officer | Allocated Base Salary | ||
| Paul M. Rady | $ | 624,195 | |
| Glen C. Warren, Jr. | $ | 469,238 | |
| Alvyn A. Schopp | $ | 345,563 | |
| Michael N. Kennedy | $ | 291,000 | |
| W. Patrick Ash | $ | 265,538 | |
| Executive Officer | 2022 Allocated Base Salary | Percentage Change in | ||||||
| Paul M. Rady | $ | 942,500 | 34 | % | ||||
| Michael N. Kennedy | $ | 478,500 | 32 | % | ||||
| W. Patrick Ash | $ | 420,500 | 43 | % | ||||
| Yvette K. Schultz | $ | 344,375 | (2) | |||||
| (1) | The amount of base salary allocated to the Company changes from year to year based on the NEO AM Reimbursement Percentage for that year. As a result, increases or decreases in the amount of base salary allocated to the Company may not indicate an increase or decrease in the executive’s aggregate base salary. This column indicates the increase in aggregate base salary paid to the Named Executive Officers for services provided to both the Company and Antero Midstream that was approved by both the Compensation Committee and the AM Compensation Committee. |
| (2) | Ms. Schultz was not a Named Executive Officer in 2021. |
Annual cash incentive awards paid based on pre-established metrics selected by the Compensation Committee and the AM Compensation Committee,payments, which we also refer to as cash bonuses, have historically beenare a key component of each Named Executive Officer’s annual compensation package. However, in 2020 the Compensation Committee, in discussion with the AM Compensation Committee, determined that the global COVID-19 pandemic and the resulting economic downturn paired with a great deal of uncertainty in the oil and gas markets made the establishment of meaningful quantitative goals for a 2020 annual cash incentive program impossible. The Compensation Committee andadopted bonus targets for each of the AMNamed Executive Officers, expressed as a percentage of base salary. The Compensation Committee, felt it would best serve our stockholders if they retained maximum flexibilitybased on analysis provided by its independent consultant, NFPCC, determined that a slight increase from 120% to appropriately shape this element130% was appropriate for Mr. Rady to align his compensation with the 75th percentile of compensationthe 2022 Peer Group. The Compensation Committee did not elect to increase the target bonus percentage for any other Named Executive Officer except for Ms. Schultz, whose target bonus percentage was increased in connection with her appointment as Chief Compliance Officer, SVP – Legal and General Counsel on January 1, 2022. The bonus target percentages for our Named Executive Officers for 2020 following completion of this unprecedented year and the opportunity to review the Company’s performance, our Named Executive Officers’ performance, the economic landscape in the oil and gas industry, and the state of the global economy.
The following were 2020 achievements by the Company and our Named Executive Officers particularly noted by the Compensation Committee during its subjective performance assessment following the end of the year:
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While no target bonuses were established for our Named Executive Officers in 2020, the Compensation Committee and the AM Compensation Committee used each named Executive Officer’s 2019 target cash bonus as a point of reference, though they decided to increase the target bonus used for these purposes for Patrick Ash from 80% to 85%. The target incentive bonuses used to determine the 2020 cash bonus for our Named Executive Officers2022 were as follows:
| Executive Officer | Target Bonus (as a % of base salary) | |||
| Paul M. Rady | ||||
| % | ||||
| Michael N. Kennedy | 100 | % | ||
| W. Patrick Ash | 85 | % | ||
| Yvette K. Schultz | 85 | % | ||
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2022 Performance Metrics
After consideringThe maximum payout opportunity under the achievements noted above, ourannual incentive program is 200% of the Named Executive Officer’s target bonus.
In April 2022, the Compensation Committee approved an annual incentive plan for the 2022 fiscal year. The 2022 annual incentive plan mirrors the 2021 annual incentive plan with the addition of a total debt metric and a slight decrease in the AMweighting of each of Net Debt/EBITDAX and Cash Costs to make room for the new metric. Changes to the metrics used for the 2022 annual incentive program as compared to 2021, were intended to more closely align our compensation program goals with the current priorities of our stockholders. This structure is intended to provide payout levels that are consistent with our stockholders’ investment objectives, while remaining competitive with companies with which we compete for executive talent.
In April of 2022 the Compensation Committee decidedselected the following metrics, weightings and performance levels for the 2022 annual cash incentive program.
| Selected Metrics | Weighting | Threshold Performance (50%) | Target Performance (100%) | Maximum (200%) | Performance Score (% of Target) | Weighted Score | ||||||
| Operational Strategy Execution | ||||||||||||
| Meeting Budgeted D&C Capital ($ Millions) |  |
| 0% | 0% | ||||||||
| Meeting Budgeted Production Volumes (MMcfe/d) |  |  | 95.7% | 23.9% | ||||||||
| Net Debt/EBITDAX |  |  | 200.0% | 25.0% | ||||||||
| Total Debt ($ Millions) |  |  | 200.0% | 25.0% | ||||||||
| Cash Costs ($ Millions) |  |  | 0% | 0% | ||||||||
| ESG |  | Qualitative Assessment | 200.0% | 30.0% | ||||||||
| Preliminary Total | 103.9% | |||||||||||
| Discretionary Increase | 46.1% | |||||||||||
| Total | 150% | |||||||||||
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| Metric | Definition | Rationale | ||
| D&C Capital | Drilling and Completion (“D&C”) capital represents the accrued drilling and completion capital for 2022, as presented in the 4th quarter of 2022, the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023, and our Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 15, 2023. | Managing capital motivates our Named Executive Officers to operate within acceptable budgetary guidelines. | ||
| Average Net Production Volumes | Average net production volumes on an equivalent basis (MMcfe/d), as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023 and our Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 15, 2023. Assumes no adjustments related to royalty adjustments for uneconomic natural gas liquids (“NGLs”). | Production volumes are critical to our profitability. Measuring these volumes motivates our Named Executive Officers to grow our business responsibly. | ||
| Net Debt/EBITDAX | Year-end 2022 Net Debt divided by 2022 full-year Adjusted EBITDAX, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 15, 2023. “Net Debt” is calculated as the Company’s total debt less cash and cash equivalents. “Adjusted EBITDAX” is the Company’s net income (loss), including noncontrolling interests, before interest expense, interest income, gains or losses from commodity derivatives and marketing derivatives, amortization of deferred revenue but including net cash receipts or payments on derivative instruments included in derivative gains or losses other than proceeds from derivative monetizations, income taxes, impairments, depletion, depreciation, amortization, and accretion, exploration expense, equity-based compensation, gain or loss on early extinguishment of debt, contract termination and rig stacking costs, loss on sale of the equity method investment shares, equity in earnings or loss of unconsolidated affiliates, water earnout, simplification transaction fees, gain or loss on sale of assets, Antero Midstream Partners related adjustments and Martica related adjustments. | Managing the balance sheet leverage is essential for growing our business efficiently. Net Debt/EBITDAX is a key debt coverage ratio that our Compensation Committee believes motivates management to minimize debt relative to cash flow. | ||
| Total Debt | Year end total debt as reported in the Company’s press release. | Managing absolute levels of total debt incentivizes management to protect the balance sheet through cyclical commodity price environments that could result in material changes in the cash flow of the business. | ||
| Cash Costs | Includes lease operating expense, gathering, compression, processing, transportation, production and ad valorem taxes, net marketing expense and general and administrative costs (excluding equity-based compensation). | Controlling cash costs motivates our Named Executive Officers to operate in a disciplined and efficient manner. | ||
| ESG | The Compensation Committee of our Board considered the company’s ESG plan in this assessment, which included non-financial performance goals to: continue progress towards meeting our 2025 climate goals, demonstrate leading safety performance compared to industry peers, reduce the number of reportable spills, provide a safe environment for our employees and contractors as we navigate the Covid-19 pandemic, enhance reporting on company community engagement and relations efforts, conduct a climate risk analysis as required by the Taskforce on Climate-related Financial Disclosures, create an inter-departmental ESG Advisory Council to manage ESG challenges and opportunities throughout the organization, require employee training with respect to the following company policies: Human Labor and Indigenous Rights, Diversity and Inclusion, and Supplier Code of Conduct. | These functions are critical to the success of the business and the execution of our overall strategy. Our people are motivated to work in a safe environment that shows progress toward sustainable environmental goals. |
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2022 Annual Incentive Program Payouts
When determining the performance score for the ESG metric the Compensation Committee considered an evaluation by the ESG Committee assessing progress on ESG goals in 2022. The ESG Committee concluded that eachwe substantially exceeded expectations with regard to these goals. Key goals met during 2022 were: significant progress on 2023 climate targets including (36% reduction in Scope 1 GHG emissions; 39% reduction in Scope 1 GHG intensity; 67% reduction in methane intensity; and 65% reduction in methane leak loss rate from our 2019 baseline). In addition, TRIR results are 63% below industry average and 100% participation in mandatory policy training (Human Rights/Indigenous; Diversity and Inclusion; Supplier Code of Conduct). As a result, the Compensation Committee awarded a performance score at the maximum level.
After giving consideration to the results of the annual incentive program of 103.9%, the Compensation Committee felt that such result did not adequately reflect the performance of the Named Executive Officers, other than Mr. Warren should receive anas a result the Compensation Committee increased the annual cash bonus equalincentive program payout to 115%reflect 150% of their respective 2019 target bonus amounts.performance. The Compensation Committee considered market-based information presented by NFPCC, the Company’s superior stock performance (2022 TSR of 77%, leading all peers), increased rates of inflation and operating results. The Compensation Committee’s decision, in addition to being market based, also reflected key operating metrics beyond those contemplated in the AMannual incentive plan. The Company’s TSR for 2022 was 77%, leading its peers. In addition, even though the Company exceeded capital expenditure and cash cost goals, it was still able to generate substantial free cash flow. Thus, the Compensation Committee determinedbelieves that Mr. Warrenthese factors should receive a slightly higher bonus, equal to 122% of his 2019 target bonus,be considered in recognitionthe results of the significant role he played in the creation and execution of our debt reduction strategy. 2022 annual incentive plan through a discretionary adjustment.
The 20202022 annual cash bonus amounts reported below reflect the portion of the annual cash bonus for each Named Executive Officer allocated to the Company. For additional information, see “Implementing Our Compensation Program Objectives—Role of the Antero Midstream Compensation Committee and Allocation of Compensation Expenses” above. The amounts below are reported in the “Bonus” column of the Summary Compensation Table.
| Executive Officer | Percentage of 2019 Target Bonus Paid for 2020 Performance | Allocated 2020 Annual Cash Bonus Payments |
| Paul M. Rady | 115% | $ 861,389 |
| Glen C. Warren, Jr. | 122% | $ 574,289 |
| Alvyn A. Schopp | 115% | $ 337,788 |
| Michael N. Kennedy | 115% | $ 284,453 |
| W. Patrick Ash | 115% | $ 259,563 |
| Executive Officer | Preliminary Percentage of 2022 Target Bonus to be Paid for 2022 Performance | Preliminary Allocated 2022 Annual Cash Bonus Payments(1) | Final Percentage of 2022 Target Bonus to be Paid for 2022 Performance | Final Allocated 2022 Annual Cash Bonus Payments(2) | |||||||||||
| Paul M. Rady | 103.9 | % | $ | 1,273,035 | 150 | % | $ | 1,837,875 | |||||||
| Michael N. Kennedy | 103.9 | % | $ | 497,162 | 150 | % | $ | 717,750 | |||||||
| W. Patrick Ash | 103.9 | % | $ | 371,365 | 150 | % | $ | 536,138 | |||||||
| Yvette K. Schultz | 103.9 | % | $ | 304,135 | 150 | % | $ | 439,078 | |||||||
| (1) | The amounts in this column are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, below. |
| (2) | The portion of the annual cash bonus payments attributable to the Compensation Committee’s discretionary increase is reported in the “Bonus” column of the Summary Compensation Table, below. |
Long-Term Incentive Awards
January 2020 RetentionAnnual Long-Term Incentive Awards Granted in 2022
In January 2020, our Compensation Committee approved non-recurring retention awards to Messrs. Schopp, Kennedy and Ash, inEach of the formNamed Executive Officers received a grant comprised 50% of restricted stock units and cash awards pursuant to the Prior LTIP. These awards vest over the course50% of two years for Mr. Schopp and in equal installments over the course of three years for Messrs. Kennedy and Ash. The total value of the cash awards granted to Messrs. Schopp, Kennedy and Ash by us in 2020 was as follows: $2,000,000, $800,000 and $500,000, respectively. Details regarding the restricted stock units granted can be found in the table entitled “Grants of Plan-Based Awards for Fiscal Year 2020,” below. The Compensation Committee believes these awards are imperative to help us succeed in implementing our short- and long-term business plans in the current environment of lower commodity prices and challenging capital markets because they help us retain these key executives. The Compensation Committee determined that restricted stock units and cash awards would generally have the strongest retentive effect.
Messrs. Schopp, Kennedy and Ash are uniquely qualified to execute our goals due to their institutional knowledge, strategic insight and unique skill sets. We feel this retention program adds a level of assurance
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to achieve our corporate objectives and maintain continuity, which we deem critical at this time.
Mr. Schopp has been an integral member of our senior management team for over 17 years. We believe he is vital to our continued contract negotiations for our asset sale program in 2020 and to our regulatory and litigation management due to his experience and knowledge of ongoing matters and negotiations, the breadth of his industry contacts, and his past litigation success. The awards were designed to motivate Mr. Schopp to lead certain ongoing projects to a successful completion, as well as to prepare a succession team to seamlessly take over his work following his eventual retirement.
Mr. Kennedy is a critical player in developing our corporate finance and debt restructuring program in 2020 as well as our financial plan and financial risk mitigation strategy for the next several years. Further, Mr. Kennedy continues to provide valuable tactical advice related to budget management, forecasting and finance.
Mr. Ash is one of the chief architects of our development program and was key in providing data to management required for our asset sale program as well as for other critical initiatives for 2020. He plays a critical role in developing our annual business outlook and ensuring delivery of an accurate and timely annual audited reserve report, upon which our financial and operational plans are built.
We strongly believe that our people are our greatest asset and that consistent leadership through challenging economic times is critical.
July 2020 Long-Term Incentive Awards
Messrs. Rady and Warren received grants of restricted stock units and performance share units in July 2020April of 2022 pursuant to the AR LTIP. The Compensation Committee did not grant annual long-term equity incentive awards to Messrs. Schopp, Kennedy and Ash in July of 2020 because they received non-recurring retention awards in January of 2020. The restricted stock units, or “RSUs,” granted to Messrs. Rady and Warrenthe Named Executive Officers in 20202022 vest ratably on the April 15first three anniversaries of eachthe date of 2021, 2022, 2023 and 2024,grant, subject to continued service. The Compensation Committee reduced the vesting period from four years, as in prior years, to three years to be more in line with market practice. One-half of the performance share units, or “PSUs,” granted to Messrs. Rady and Warrenour Named Executive Officers in 2020 were2022 will vest based on absolute total stockholder return, or “TSR,” withwhile the other half will vest based on relative TSR measured against our Peer Group.
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Net Debt to EBITDAX multiple. The Compensation Committee selected absolute TSR because it provides a rigorous framework that rewards the Named Executive Officers for improving absolute stock price, and because it directly aligns the incentive for our Named Executive Officers to our investors’ experience. The Compensation Committee selected Net Debt to EBITDAX multiple because managing balance sheet leverage is essential for growing our business efficiently and this metric is a key debt coverage measurement that the Compensation Committee believes will motivate management to minimize debt relative to cash flow.
The Compensation Committee also decided to add distribution equivalent rights (“DERs”) to the performance share units granted in 2022. Previously, DERs had been included in restricted share unit agreements but not performance unit agreements.
Absolute TSR PSUs
The absolute TSR PSUs granted to Messrs. Rady and Warren in 2020April of 2022 have four performance periods. One quarter of the target amount of PSUs may be earned based on performance for each of the following performance periods: July 15, 2020 to April 15, 2021; April 15, 2021 through April 15, 2022; April 15, 2022 to April 15, 2023; and JulyApril 15, 20202023 through April 15, 2024; April 15, 2024 to April 15, 2023.2025; and April 15, 2022 to April 15, 2025.
The payouts for the absolute April TSR PSUs are determined as follows:
| Performance Level | Absolute TSR | Percentage of Eligible Target Amount Earned for Each Performance Period % | Percentage of Target PSUs Earned for Each Performance Period | ||||
| Floor | 0 | 0% | 0% | ||||
| Target | 15 | % | 100% | 25% | |||
| Maximum | 20 | % | 150% | 37.5% | |||
| Performance Level | Absolute TSR | Percentage of Eligible Target Amount Earned for Each Performance Period % | Percentage of Target PSUs Earned for Each Performance Period | |||||||||
| Floor | 0 | 0 | % | 0 | % | |||||||
| Target | 15 | % | 100 | % | 25 | % | ||||||
| Maximum | 20 | % | 200 | % | 50 | % | ||||||
“Absolute TSR” for purposes of these PSUs is measured by reference to the Company’s 20-day average volume-weighted closing price per share of stock for the first twenty days of the applicable performance period and the Company’s 20-day average volume-weighted closing price per share of stock for the last twenty days of the applicable performance period. If the Company’s absolute TSR falls between the floor and target amounts or the target and maximum amounts, then the percentage of the target amount of PSUs that are earned for the relevant performance period will be determined using linear interpolation between the relevant performance levels.
Net Debt to EBITDAX PSUs
The Net Debt to EBITDAX multiple PSUs granted in April of 2022 have three performance periods. One third of the target amount of PSUs may be earned based on performance during each of the following performance periods: January 1, 2022 to December 31, 2022; January 1, 2023 through December 31, 2023; and January 1, 2024 to December 31, 2024.
The payouts for the Net Debt to EBITDAX PSUs are determined as follows:
| Level | Net Debt to EBITDAX Multiple | Percentage of Eligible Target Amount Earned for Each Performance Period* | Percentage of Target Amount of PSUs Earned For Each Performance Period* | |||||||||
| Floor | > 2.5 | x | 0 | % | 0 | % | ||||||
| Target | 2.0 | x | 100 | % | 33.33 | % | ||||||
| Maximum | 1.5 | x | 200 | % | 66.66 | % | ||||||
For definitions regarding “Net Debt” and “EBITDAX” as used in the 2022 Net Debt to EBITDAX multiple PSUs, please see “Annual Cash Incentive Awards –2022 Performance Metrics” above. If the Company’s Net Debt to EBITDAX multiple falls between the floor and target amounts or the target and maximum amounts, then the percentage of the target amount of PSUs that are earned for the relevant performance period will be determined using linear interpolation between the relevant performance levels.
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To achieve payout underSpecial Long-Term Incentive Awards Granted in 2022
In October of 2022, after working with management and NFPCC to complete an evaluation of the relative TSR PSUs,value of the Company’s absolute TSR must be in at leastperformance and equity compensation granted by the 25th percentileCompany over the previous three years as compared to its peers, the TSRCompensation Committee granted additional long-term incentive awards to the Named Executive Officers as a correction of a misalignment between pay and performance (the “October Awards”). The Company has reduced long term debt by over $4.3 billion, since December 31, 2018. This is a key factor affecting Company financial stability and the Compensation Committee considered this in their decision. Half of the companiesOctober Awards were granted as restricted stock units, which will vest on the first three anniversaries of October 15, 2022. The other half of the October Awards were granted as performance share units, 50% of which vest based on absolute TSR and 50% of which vest based on the ratio of Net Debt to EBITDAX.
Absolute TSR PSUs
The absolute TSR PSUs granted in 2022 have four performance periods. One quarter of the Peer Group. target amount of PSUs may be earned based on performance for each of the following performance periods: January 1, 2023 through December 31, 2023; January 1, 2024 through December 31, 2024; January 1, 2025 through December 31, 2025; and January 1, 2023 through December 31, 2025.
The payouts for the relativeabsolute October TSR PSUs are determined as follows:
| Performance Level | Company’s TSR Ranking | Percentage of Eligible Target Amount Earned for Each Performance Period | Percentage of Target PSUs Earned for Each Performance Period | ||||
| Below Threshold | <25th Percentile | 0% | 0% | ||||
| Threshold | 25th Percentile | 50% | 12.5% | ||||
| Target | 50th Percentile | 100% | 25% | ||||
| Maximum | > 75th Percentile | 150% | 37.5% | ||||
| Performance Level | Absolute TSR | Percentage of Eligible Target Amount Earned for Each Performance Period % | Percentage of Target PSUs Earned for Each Performance Period | |||||||||
| Floor | 0 | 0 | % | 0 | % | |||||||
| Target | 10 | % | 100 | % | 25 | % | ||||||
| Maximum | 20 | % | 200 | % | 50 | % | ||||||
Historically,Net Debt to EBITDAX PSUs
The Net Debt to EBITDAX multiple PSUs granted in October of 2022 have three performance periods. One third of the target amount of PSUs may be earned based on performance during each of the following performance periods: January 1, 2023 to December 31, 2023; January 1, 2024 through December 31, 2024; and January 1, 2025 to December 31, 2025. The payouts for the Net Debt to EBITDAX PSUs are determined using the same floor, target and maximum multiples as the April Net Debt to EBITDAX PSUs.
Target Value of Long-Term Incentive Awards
The table below shows the values approved by the Compensation Committee establishesfor the number ofannual long-term incentive awards granted to our Named Executive Officers in 2022. These values were established by setting a target value and granting a number of awards equal to that value. In 2020, the Compensation Committee considered the overall value of long-term incentive awards granted to our Named Executive Officers but took a slightly different approach when determining the number of awards granted during the annual grant process. At the time the PSUs and restricted stock units were granted to Messrs. Rady and Warren in July 2020, our stock price was depressed and there was a great deal of uncertainty about the market generally (because of the COVID-19 pandemic) and the oil and gas industry in particular (as a result of depressed oil and gas prices). In an effort to balancealign target equity compensation values with the twin goals of retaining our Named Executive Officers and maintaining a reasonable burn rate for the AR LTIP, the number of annual long-term incentive awards granted to our employee population in July 2020 was generally determined by establishing the desired duration75th percentile of the AR LTIP, dividing the remaining pool of shares reserved for issuance thereunder by that figure, and then allocating approximately that number of restricted stock units and PSUs(i.e., the number attributable to one year) among the recipients in proportions similar to those granted in 2019.2022 Peer Group.
Due to market conditions in 2020 and to better align Messrs. Rady’s and Warren’s compensation packages with our stockholders’ investment experience, the total value of Messrs. Rady’s and Warren’s long-term incentive awards in 2020 was approximately 60% lower than the value of the long-term incentive awards granted to such Named Executive Officers in 2019.
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| Executive Officer | 2022 April Target Long-Term Incentive Value(1) | 2022 October Target Long-Term Incentive Value(1) | ||||
| Paul M. Rady | $ 9,500,000 | $ 10,000,000 | ||||
| Michael N. Kennedy | $ 3,250,000 | $ 3,421,000 | ||||
| W. Patrick Ash | $ 2,600,000 | $ 2,736,000 | ||||
| Yvette K. Schultz | $ 2,500,000 | $ 2,632,000 |
| (1) | The amounts set forth in this column differ from the amounts set forth under the “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal Year 2022” below, as these amounts were set by the Compensation Committee and then divided by the closing price on the applicable date of grant to determine the number of restricted stock units and target performance share units to be granted. The amounts set forth under “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal Year 2022” below reflect the grant date fair value of the number of restricted stock units and target performance share units granted, as computed in accordance with FASB ASC Topic 718, resulting in a slightly higher value attributable to the grants under those tables. |
The number of performance share units and restricted stock units granted to our Named Executive Officers in 20202022 are described more fully under “Grants of Plan-Based Awards for Fiscal Year 2020”2022” below.
Other Benefits
Health and Welfare Benefits
Our Named Executive Officers are eligible to participate in all of our employee health and welfare benefit arrangements on the same basis as other employees (subject to applicable law). These arrangements include medical, dental, vision and disability insurance, as well as health savings accounts.
We provide these benefits to ensure that we can competitively attract and retain officers and other employees. This is a fixed component of compensation, and these benefits are provided on a non-discriminatory basis to all employees.
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Retirement Benefits
We maintain an employee retirement savings plan through which employees may save for retirement or future events on a tax-advantaged basis. Participation in the 401(k) plan is at the discretion of each individual employee, and our Named Executive Officers participate in the plan on the same basis as all other employees. The plan permits us to make discretionary matching and non-elective contributions.
During 2020,2022, the Company matched 100% of the first 6% (reduced to 4% mid-year as a cost-saving measure) of eligible compensation that employees contributed to the plan. We increased this amount to 6% effective January 1, 2023. These matching contributions are immediately fully vested. Antero Midstream reimburses the Company for a portion of these matching contributions as a general and administrative expense.
Perquisites and Other Personal Benefits
We believe the total mix of compensation and benefits provided to our Named Executive Officers is currently competitive. Therefore, perquisites do not play a significant role in our Named Executive Officers’ total compensation.
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2023 Compensation Decisions
Base Salaries
In March 2021,2023, after comparing base salary levels to those of similarly situated executives in the 2023 Peer Group, reviewing the Company’s performance during 2020,2022, and discussing the recommendations of Messrs.
Rady and WarrenKennedy and its independent compensation consultant for 2021, Longnecker,NFPCC, the Compensation Committee approved the following increases to base salary for the Named Executive Officers:Officers who continue to serve as executive officers during 2023:
| Executive Officer | 2020 Allocated Base Salary | 2021 Allocated Base Salary (1) | Percentage Increase | |||||
| Paul M. Rady | $ 624,195 | $ 720,225 | 15% | |||||
| Glen C. Warren, Jr. | $ 469,238 | $ 509,250 | 9% | |||||
| Alvyn A. Schopp | $ 345,563 | $ 363,750 | 5% | |||||
| Michael N. Kennedy | $ 291,000 | $ 327,375 | 13% | |||||
| W. Patrick Ash | $ 265,538 | $ 301,913 | 14% | |||||
| Executive Officer | 2022 Allocated Base Salary(1) | 2023 Allocated Base Salary(1) | Percentage Increase | |||||||||
| Paul M. Rady | $ | 942,500 | $ | 1,036,750 | 10 | % | ||||||
| Michael N. Kennedy | $ | 478,500 | $ | 526,350 | 10 | % | ||||||
| Yvette K. Schultz | $ | 344,375 | $ | 378,813 | 10 | % | ||||||
| (1) | Allocated base salary included here calculated based on the |
Annual Cash Incentive Awards
Due to improving market conditions and relief from the global pandemic, inIn April 2021,2023, the Compensation Committee approved an annual cash incentive plan for the 20212023 fiscal year. For 2021, the Compensation Committee returned to the structure of our 2019The 2023 annual incentive program, which weplan mirrors the 2022 annual incentive plan. We believe this structure motivates our Named Executive Officers to accomplish specific objectives. In addition, the Compensation Committee modified the maximum payout opportunity from 150% of target, as was the case in 2019 (the most recent year during which target bonus amounts were established), to 200% of target, and incorporated an additional qualitative performance metric tied to ESG, which will be reflective of the strategy detailed in our sustainability report. This structure is intended to provide payout levelsobjectives that are consistent withimportant to our stockholders’ investment experience, while remaining competitive with companies with which we compete for executive talent.success and sustainable growth.
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Long-Term Incentive Awards
TheConsistent with 2022, the Compensation Committee granted 50% performance-based long-term equity awards and 50% time-based long-term equity awards to our Named Executive Officers in April 2021.March 2023. These awards are subject to the terms and provisions of the 2020 AR LTIP and the award agreements pursuant to which they were granted.
Other Matters
Employment, Severance or Change-in-Control Agreements
We do not maintain any employment, severance or change-in-control agreements with any of our Named Executive Officers.
As discussed below under “Potential Payments Upon a Termination or a Change in Control,” each of Messrs. Rady, Warren, Schopp, Kennedy and Ashour Named Executive Officers would be entitled to receive accelerated vesting of histheir performance share units, restricted stock units and cash retention awards (if applicable) that remain unvested upon histheir termination of employment with us under certain circumstances or upon the occurrence of certain corporate events.
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Stock Ownership Guidelines
Under our stock ownership guidelines, our executive officers are required to own a minimum number of shares of our common stock within five years of becoming an executive officer. In particular, each of our executive officers is required to own shares of our common stock having an aggregate fair market value equal to at least a designated multiple of the executive officer’s base salary. The guidelines for executive officers are set forth in the table below.
| Officer Level | Ownership Guideline |
| Chief Executive Officer, President, and Chief Financial Officer | 5x annual base salary |
| Vice President | 3x annual base salary |
| Other Officers (if applicable) | 1x annual base salary |
Compliance with these guidelines is measured as of June 30 of each year. If an individual covered by the ownership guidelines satisfies the guidelines on a prior determination date, a subsequent decrease in our stock price will not cause that executive to be out of compliance on a later determination date. As of June 30, 2020,2022, all of our Named Executive Officers who have been executive officers for at least five yearsand directors were in compliance with these guidelines. As of June 30, 2020, Messrs. Kennedy and Ash had been executive officers for less than five years andguidelines or had time remaining to achieve the requisite ownership levels.before compliance was required. Consistent with our stock ownership guidelines, any noncompliance may be considered by the Compensation Committee when making future compensation or promotion decisions.
These stock ownership guidelines are designed to align our executive officers’ interests more closely with those of our stockholders. The chart below shows the significant levels of stock ownership of our Named Executive Officers and the ratio of their ownership to their respective base salaries.
We believe the high level of ownership demonstrates significant alignment with our stockholders.
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Ratio of Stock Ownership Value to Base Salary
Shares directly and beneficially owned by our Named Executive Officers count towards satisfaction of our stock ownership guidelines. Vested and unvested stock options, unvested restricted stock units, and other conditional equity-based awards (including performance-based awards) do not count towards satisfaction of our stock ownership guidelines. However, for purposes of the chart above, unvested restricted stock units held by our Named Executive Officers are included. Values reported in the chart above are as of June 30, 2020, the measurement date for our stock ownership guidelines.
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Tax and Accounting Treatment of Executive Compensation Decisions
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), generally imposes a $1 million limit on the amount of compensation paid to “covered employees” (as defined in Section 162(m)) that a public corporation may deduct for federal income tax purposes in any year. The “Tax Cuts and Jobs Act,” enacted in 2017, repealed the performance-based compensation exception to the Section 162(m) deduction limitation for tax years beginning after December 31, 2017. In addition, the Tax Cuts and Jobs Act generally expanded the scope of who is considered a “covered employee.” With these changes, compensation paid to certain of our executives will be subject to the $1 million per year deduction limitation imposed by Section 162(m) unless such compensation qualifies for the transition relief applicable to certain compensation arrangements in place as of November 2, 2017.. While we will continue to monitor our compensation programs in light of the deduction limitation imposed by Section 162(m), our Compensation Committee considers it important to retain the flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders. As a result, we have not adopted a policy requiring that all compensation be fully deductible. The Compensation Committee may conclude that paying compensation at levels in excess of the limits under Section 162(m) is in the best interests of the Company and our stockholders. It is likely that the Company will not be able to deduct for federal income tax purposes a portion of the compensation paid to our Named Executive Officers in 2020.2022.
Many other Code provisions and accounting rules affect the payment of executive compensation and are generally taken into consideration as our compensation arrangements are developed. Our goal is to create and maintain compensation arrangements that are efficient, effective and in full compliance with these requirements.
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Risk Assessment
We have reviewed our compensation policies and practices to determine whether they create risks that are reasonably likely to have a material adverse effect on our Company. In connection with this risk assessment, we reviewed the design of our compensation and benefits program and related policies and determined that certain features of our programs and corporate governance generally help mitigate risk. Among the factors considered were the mix of cash and equity compensation, the balance between short- and long-term objectives of our incentive compensation, the degree to which programs provide for discretion to determine payout amounts, and our general governance structure.
Our Compensation Committee believes that evaluating overall business performance and implementing Company objectives assists in mitigating excessive risk-taking that could harm our value or reward poor judgment by our executives. Several features of our programs reflect sound risk-management practices.
| • | The Compensation Committee believes our overall compensation program provides a reasonable balance between short- and long-term objectives, which helps mitigate the risk of excessive risk-taking in the short term. |
| • | The metrics that determine ultimate value awarded under our incentive compensation programs are associated with total Company value. We do not believe these metrics create pressure to meet specific financial or individual performance goals. |
| • | The mix of time- and performance-based equity awards and multi-year vesting of our equity awards discourages excessive risk-taking and undue focus on short-term gains that may not be sustainable. |
Due to the foregoing program features, the Compensation Committee concluded that our compensation policies and practices for all employees, including our Named Executive Officers, are not reasonably likely to have a material adverse effect on the Company.
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Tally Sheets
The Compensation Committee and the AM Compensation Committee useuses tally sheets as a reference point in reviewing and establishing our Named Executive Officers’ compensation. The tally sheets provide a holistic view of all material elements of our Named Executive Officers’ compensation, including base salary, annual cash incentive awards, long-term equity incentive awards and indirect compensation such as perquisites and retirement benefits, including the portions of such compensation that are paid for services provided to Antero Midstream.benefits. Tally sheets also demonstrate the amounts each executive could potentially receive under various termination and change in control scenarios, and include a summary of all shares beneficially owned.
Hedging and Pledging Prohibitions
Our Insider Trading Policy prohibits our Named Executive Officers from engaging in speculative transactions involving our common stock, including buying or selling puts or calls, short sales, purchasing securities on margin, or otherwise hedging the risk of ownership of such securities. The Insider Trading Policy also prohibits our Named Executive Officers from pledging shares of such securities as collateral.
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Clawback Policy
We have adopted a general clawback policy covering long-term incentive award plans and arrangements. The clawback policy applies to our current Named Executive Officers as well as certain of our former Named Executive Officers. Generally, recoupment of compensation would be triggered under the policy in the event of a financial restatement caused by fraud or intentional misconduct. In the event of such misconduct, we may recoup performance-based equity compensation that was granted, earned or vested based wholly or in part upon the attainment of any financial reporting measure during the period in which such misconduct took place. The clawback policy gives the policy administrator discretion to determine whether a clawback of compensation should be initiated in any given case, as well as the discretion to make other determinations, including whether a covered individual’s conduct meets a specified standard, the amount of compensation to be clawed back, and the form of reimbursement.
In order to comply with applicable law, the clawback policy may be updated or modified once the SEC adopts final clawback rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In addition, the Prior LTIP and the AR LTIP generally provide that, to the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise determined by the Compensation Committee, all awards under the Prior LTIP and the AR LTIP are subject to the provisions of any clawback policy the Company implements.
In October of 2022, the final clawback rules pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 were adopted, and in February of 2023, the New York Stock Exchange proposed listing standards in accordance with the final clawback rules. The Company intends to revise its clawback policy to comply with the final clawback rules and related NYSE listing standards by the applicable deadline.
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Compensation Committee Report
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing.
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, and at the recommendation of the Compensation Committee, the Board of Directors has determined that the Compensation Discussion and Analysis should be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K.
Compensation Committee Members*:
Robert J. Clark, Chairman
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| * | Includes all members of the Compensation Committee as of the time the Compensation Committee Report was approved for inclusion in this Proxy Statement. |
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EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table summarizes, with respect to our Named Executive Officers, information relating to the compensation earned for services rendered in all capacities during the fiscal years ended December 31, 2020, 2019,2022, 2021, and 2018. Unlike in 2018, for 2019 and 2020, the2020. The table reflects only the portion of the compensation earned by our Named Executive Officers attributable to their services to the Company, and does not include compensation earned for services provided to Antero Midstream or its subsidiaries. As a result, the compensation included for 2019 and 2020 is lower than the compensation included for 2018. See above under “Compensation Discussion and Analysis—Implementing Our Compensation Program Objectives—Role of the Antero Midstream Compensation Committee and Allocation of Compensation Expenses” for further discussion of the allocation methodology used.
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | ||||||||||||
| Paul M. Rady | 2020 | 624,195 | 861,389 | 1,948,025 | — | 10,367 | 3,443,976 | ||||||||||||
| (Chairman of the Board of Directors and Chief Executive Officer) | 2019 | 619,905 | — | 4,743,194 | 477,665 | 12,138 | 5,852,902 | ||||||||||||
| 2018 | 858,000 | — | 7,520,882 | 753,140 | 11,000 | 9,143,022 | |||||||||||||
| Glen C. Warren, Jr. | 2020 | 469,238 | 574,289 | 779,210 | — | 10,367 | 1,833,104 | ||||||||||||
| (Director, President, Chief Financial Officer and Secretary) | 2019 | 466,013 | — | 1,940,396 | 299,337 | 12,138 | 2,717,884 | ||||||||||||
| 2018 | 645,000 | — | 3,076,725 | 471,810 | 11,000 | 4,204,535 | |||||||||||||
| Alvyn A. Schopp | 2020 | 345,563 | 337,788 | 5,000,002 | — | 10,367 | 5,693,720 | ||||||||||||
| (Chief Administrative Officer and Regional Sr. Vice President) | 2019 | 339,570 | — | 970,198 | 206,627 | 12,138 | 1,528,533 | ||||||||||||
| 2018 | 442,800 | — | 1,538,352 | 276,661 | 11,000 | 2,268,813 | |||||||||||||
| Michael N. Kennedy | 2020 | 291,000 | 284,453 | 3,200,002 | — | 21,540 | 3,796,995 | ||||||||||||
| (Sr. Vice President— Finance) | 2019 | 287,344 | — | 754,597 | 174,002 | 22,470 | 1,238,413 | ||||||||||||
| 2018 | 384,375 | — | 1,538,352 | 240,157 | 11,000 | 2,173,884 | |||||||||||||
| W. Patrick Ash | 2020 | 265,538 | 259,563 | 2,500,002 | — | 10,367 | 3,035,470 | ||||||||||||
| (Sr. Vice President— Reserves, Planning & Midstream) | 2019 | 252,532 | — | 415,602 | 149,437 | 12,138 | 829,709 | ||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||||||||||
Paul M. Rady (Chairman of the Board of Directors, Chief Executive Officer and President) | 2022 | 942,500 | 564,840 | 21,853,164 | 1,273,035 | 8,282 | 24,641,821 | ||||||||||||||||||||
| 2021 | 702,900 | — | 4,791,874 | 953,132 | 8,236 | 6,456,142 | |||||||||||||||||||||
| 2020 | 624,195 | 861,389 | 1,948,025 | — | 10,367 | 3,443,976 | |||||||||||||||||||||
Michael N. Kennedy (Chief Financial Officer, and Sr. Vice President— Finance) | 2022 | 478,500 | 487,255 | 7,476,082 | 497,162 | 20,207 | 8,959,206 | ||||||||||||||||||||
| 2021 | 362,100 | 266,667 | 1,064,852 | 409,173 | 19,362 | 2,122,154 | |||||||||||||||||||||
| 2020 | 291,000 | 284,453 | 3,200,002 | — | 21,540 | 3,796,995 | |||||||||||||||||||||
W. Patrick Ash (Sr. Vice President— Reserves, Planning & Midstream) | 2022 | 420,500 | 331,440 | 5,980,860 | 371,365 | 8,410 | 7,112,575 | ||||||||||||||||||||
| 2021 | 294,650 | 166,667 | 1,064,852 | 283,011 | 8,236 | 1,817,416 | |||||||||||||||||||||
| 2020 | 265,538 | 259,563 | 2,500,002 | — | 10,367 | 3,035,470 | |||||||||||||||||||||
Yvette K. Schultz (Chief Compliance Officer, Sr. Vice President— Legal, General Counsel and Corporate Secretary) | 2022 | 344,375 | 134,943 | 5,750,785 | 304,135 | 8,410 | 6,542,648 | ||||||||||||||||||||
| 2021 | — | — | — | — | — | — | |||||||||||||||||||||
| 2020 | — | — | — | — | — | — | |||||||||||||||||||||
| (1) | |
| (2) | The amounts in this column represent the grant date fair value of restricted stock |
| (3) | The amounts in this column represent the portion of the annual incentive plan payments made pursuant to actual performance with respect to the originally approved metrics and does not include the discretionary increase of such payments, which is reported in the “Bonus” column of this table. |
| (4) | The amounts in this column represent the Company’s allocated portion of the amount of the Company’s 401(k) match for fiscal |
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Grants of Plan-Based Awards for Fiscal Year
20202022
The table below sets forth the awards granted to our Named Executive Officers during 2020,2022, including awards under the 2022 annual cash incentive plan and the performance share units and restricted stock units granted under the AR LTIP.
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or | Grant Date Fair Value of Stock and Option | |||||||||||||||
| Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Awards | ||||||||||
| Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#)(2) | ($)(3) | |||||||||
| Paul M. Rady | ||||||||||||||||||
| Absolute TSR PSUs(4) | 7/15/20 | 0 | 167,500 | 251,250 | 440,525 | |||||||||||||
| Relative TSR PSUs(5) | 7/15/20 | 83,750 | 167,500 | 251,250 | 552,750 | |||||||||||||
| RSUs(6) | 7/15/20 | 335,000 | 954,750 | |||||||||||||||
| Glen C. Warren, Jr. | ||||||||||||||||||
| Absolute TSR PSUs(4) | 7/15/20 | 0 | 67,000 | 100,500 | 176,210 | |||||||||||||
| Relative TSR PSUs(5) | 7/15/20 | 33,500 | 67,000 | 100,500 | 221,100 | |||||||||||||
| RSUs(6) | 7/15/20 | 134,000 | 381,900 | |||||||||||||||
| Alvyn A. Schopp | ||||||||||||||||||
| RSUs(6) | 1/20/20 | — | — | — | 2,092,051 | 5,000,002 | ||||||||||||
| Michael N. Kennedy | ||||||||||||||||||
| RSUs(6) | 1/20/20 | — | — | — | 1,338,913 | 3,200,002 | ||||||||||||
| W. Patrick Ash | ||||||||||||||||||
| RSUs(6) | 1/20/20 | — | — | — | 1,046,026 | 2,500,002 | ||||||||||||
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||||||||||||
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#)(3) | Awards ($)(4) | |||||||||||||||||||||||||||
| Paul M. Rady | 612,625 | 1,225,250 | 2,450,500 | |||||||||||||||||||||||||||||||||
| (April) Absolute TSR PSUs(5) | 4/15/22 | — | 67,318 | 134,636 | 3,199,625 | |||||||||||||||||||||||||||||||
| (April) Net Debt to EBITDAX PSUs(6) | 4/15/22 | — | 67,318 | 134,636 | 2,374,979 | |||||||||||||||||||||||||||||||
| (April) RSUs(7) | 4/15/22 | 134,637 | 4,749,993 | |||||||||||||||||||||||||||||||||
| (October) Absolute TSR PSUs(5) | 10/19/22 | — | 71,429 | 142,858 | 3,642,879 | |||||||||||||||||||||||||||||||
| (October) Net Debt to EBITDAX PSUs(6) | 10/19/22 | — | 71,428 | 142,856 | 2,628,550 | |||||||||||||||||||||||||||||||
| (October) RSUs(7) | 10/19/22 | 142,857 | 5,257,138 | |||||||||||||||||||||||||||||||||
| Michael N. Kennedy | 239,250 | 478,500 | 957,000 | |||||||||||||||||||||||||||||||||
| (April) Absolute TSR PSUs(5) | 4/15/22 | — | 23,030 | 46,060 | 1,094,616 | |||||||||||||||||||||||||||||||
| (April) Net Debt to EBITDAX PSUs(6) | 4/15/22 | — | 23,030 | 46,060 | 812,498 | |||||||||||||||||||||||||||||||
| (April) RSUs(7) | 4/15/22 | 46,060 | 1,624,997 | |||||||||||||||||||||||||||||||||
| (October) Absolute TSR PSUs(5) | 10/19/22 | — | 24,436 | 48,872 | 1,246,236 | |||||||||||||||||||||||||||||||
| (October) Net Debt to EBITDAX PSUs(6) | 10/19/22 | — | 24,436 | 48,872 | 899,245 | |||||||||||||||||||||||||||||||
| (October) RSUs(7) | 10/19/22 | 48,872 | 1,798,490 | |||||||||||||||||||||||||||||||||
| W. Patrick Ash | 178,713 | 357,425 | 714,850 | |||||||||||||||||||||||||||||||||
| (April) Absolute TSR PSUs(5) | 4/15/22 | — | 18,424 | 36,848 | 875,693 | |||||||||||||||||||||||||||||||
| (April) Net Debt to EBITDAX PSUs(6) | 4/15/22 | — | 18,424 | 36,848 | 649,999 | |||||||||||||||||||||||||||||||
| (April) RSUs(7) | 4/15/22 | 36,848 | 1,299,997 | |||||||||||||||||||||||||||||||||
| (October) Absolute TSR PSUs(5) | 10/19/22 | — | 19,549 | 39,098 | 996,999 | |||||||||||||||||||||||||||||||
| (October) Net Debt to EBITDAX PSUs(6) | 10/19/22 | — | 19,548 | 39,096 | 719,366 | |||||||||||||||||||||||||||||||
| (October) RSUs(7) | 10/19/22 | 39,098 | 1,438,806 | |||||||||||||||||||||||||||||||||
| - 2023 Proxy Statement | 55 |
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or | Grant Date Fair Value of Stock and Option | |||||||||||||||||||||||||||||||||
| Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Units (#)(3) | Awards ($)(4) | |||||||||||||||||||||||||||
| Yvette K. Schultz | 146,359 | 292,719 | 585,438 | |||||||||||||||||||||||||||||||||
| (April) Absolute TSR PSUs(5) | 4/15/22 | — | 17,715 | 35,430 | 841,994 | |||||||||||||||||||||||||||||||
| (April) Net Debt to EBITDAX PSUs(6) | 4/15/22 | — | 17,715 | 35,430 | 624,985 | |||||||||||||||||||||||||||||||
| (April) RSUs(7) | 4/15/22 | 35,430 | 1,249,970 | |||||||||||||||||||||||||||||||||
| (October) Absolute TSR PSUs(5) | 10/19/22 | — | 18,797 | 37,594 | 958,647 | |||||||||||||||||||||||||||||||
| (October) Net Debt to EBITDAX PSUs(6) | 10/19/22 | — | 18,797 | 37,594 | 691,730 | |||||||||||||||||||||||||||||||
| (October) RSUs(7) | 10/19/22 | 37,594 | 1,383,459 | |||||||||||||||||||||||||||||||||
| (1) | These columns represent the threshold, target and maximum amount that may be earned under our 2022 annual cash incentive plan. |
| (2) | These columns reflect the threshold, target and maximum number of shares that may be earned under performance share |
| This column reflects the number of restricted stock | |
| The amounts in this column represent the grant date fair value of restricted stock | |
| One quarter of the absolute TSR PSUs granted on | |
| One | |
| The restricted stock units granted to |
| - |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
The following is a discussion of material factors necessary to an understanding of the information disclosed in the Summary Compensation Table and the Grants of Plan-Based Awards for Fiscal Year 20202022 table.
The Compensation Committee granted annual performance share unit awardsunits to Messrs. Rady and Warrenour Named Executive Officers in July 2020.April 2022. Fifty percent of the performance share unit awardsunits will be earned (or not) based upon absolute TSR measured over four performance periods spanning each of the three years following grant, plus a cumulative period of three years following grant; and fifty percent50% of the performance share unit awardsunits will be earned (or not) based upon relativeour Net Debt to EBITDAX multiple measured over three performance periods spanning the calendar year inclusive of grant and each of the two calendar years following grant.
The Compensation Committee also granted the Named Executive Officers additional performance share units in October 2022. These performance share units are intended to correct a misalignment between pay and performance. Fifty percent of such performance share units will be earned (or not) based upon absolute TSR in each case, measured over four performance periods. Generally, these awards will not vest unlessperiods spanning each of the recipient remains continuously employed by us from thethree calendar years following grant, date through the applicable vesting date. However, allplus a cumulative period of three calendar years following grant; and 50% of the performance share unit awardsunits will be earned (or not) based upon our Net Debt to EBITDAX multiple measured over three performance periods spanning the three calendar years following grant.
Generally, the performance share units will not vest in full upon a terminationuntil the last date of a Named Executive Officer’s employment duethe final performance period applicable to his death or disability.such performance share units. The potential acceleration and forfeiture events related to these performance share units are described in greater detail under the heading “Potential Payments Upon Termination or Change in Control” below.
The Compensation Committee granted restricted stock unit awardsunits to each of our Named Executive Officers in 2020.April 2022 and October 2022. The October grant of restricted stock units are intended to correct a misalignment between pay and performance. The restricted stock units vest over a two-, three- or four-yearthree-year period, if such employees remain continuously employed by us from the grant date through the applicable vesting date. The potential acceleration and forfeiture events related to these restricted stock units are described in greater detail under the heading “Potential Payments Upon Termination or Change in Control” below.
| - |
Outstanding Equity Awards at
20202022 Fiscal Year-End
The following table provides information concerning equity awards granted by the Company to our Named Executive Officers that had not vested as of December 31, 2020.2022.
| Option Awards | Stock Awards | ||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Unexercisable (#) | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Units That Have Not Vested (#) | Market Value of Units That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | |||||||||||||||
| Paul M. Rady | |||||||||||||||||||||||
| Restricted Stock Units(3) | 349,875 | 1,906,819 | |||||||||||||||||||||
| Performance Share Units(4) | 1,173,991 | 6,398,251 | |||||||||||||||||||||
| Stock Options | — | 100,000 | 50.00 | 4/15/25 | |||||||||||||||||||
| Glen C. Warren, Jr. | |||||||||||||||||||||||
| Restricted Stock Units(3) | 143,917 | 784,348 | |||||||||||||||||||||
| Performance Share Units(4) | 475,701 | 2,592,570 | |||||||||||||||||||||
| Stock Options | — | 66,667 | 50.00 | 4/15/25 | |||||||||||||||||||
| Alvyn A. Schopp | |||||||||||||||||||||||
| Restricted Stock Units(3) | 2,095,721 | 11,421,679 | |||||||||||||||||||||
| Performance Share Units(4) | 270,684 | 1,475,228 | |||||||||||||||||||||
| Stock Options | — | 25,000 | 50.00 | 4/15/25 | |||||||||||||||||||
| Michael N. Kennedy | |||||||||||||||||||||||
| Restricted Stock Units(3) | 1,342,582 | 7,317,072 | |||||||||||||||||||||
| Performance Share Units(4) | 114,067 | 621,665 | |||||||||||||||||||||
| Stock Options | — | 25,000 | 50.00 | 4/15/25 | |||||||||||||||||||
| Stock Options | — | 60,000 | 54.15 | 10/16/23 | |||||||||||||||||||
| W. Patrick Ash | |||||||||||||||||||||||
| Restricted Stock Units(3) | 1,073,555 | 5,850,875 | |||||||||||||||||||||
| Performance Share Units(4) | 23,283 | 126,892 | |||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Unexercisable (#) | Number of Securities Underlying Unexercised Options Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Units That Have Not Vested (#) | Market Value of Units That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | ||||||||||||||||||||||
| Paul M. Rady | ||||||||||||||||||||||||||||||
| Restricted Stock Units(3) | 1,135,028 | 35,174,518 | ||||||||||||||||||||||||||||
| Performance Share Units(4) | 642,927 | 19,924,308 | ||||||||||||||||||||||||||||
| Stock Options | — | 100,000 | 50.00 | 4/15/25 | ||||||||||||||||||||||||||
| Michael N. Kennedy | ||||||||||||||||||||||||||||||
| Restricted Stock Units(3) | 644,124 | 19,961,403 | ||||||||||||||||||||||||||||
| Performance Share Units(4) | 122,269 | 3,789,116 | ||||||||||||||||||||||||||||
| Stock Options | — | 25,000 | 50.00 | 4/15/25 | ||||||||||||||||||||||||||
| Stock Options | — | 60,000 | 54.15 | 10/16/23 | ||||||||||||||||||||||||||
| W. Patrick Ash | 530,260 | 16,432,757 | ||||||||||||||||||||||||||||
| Restricted Stock Units(3) | 104,817 | 3,248,279 | ||||||||||||||||||||||||||||
| Performance Share Units(4) | ||||||||||||||||||||||||||||||
| Yvette K. Schultz | 153,744 | 4,764,527 | ||||||||||||||||||||||||||||
| Restricted Stock Units(3) | — | 67,119 | 2,080,018 | |||||||||||||||||||||||||||
| Performance Share Units(4) | ||||||||||||||||||||||||||||||
| (1) | The amounts reflected in this column represent the market value of our common stock underlying (i) the unvested restricted stock |
| (2) | The amounts reflected in this column represent the market value of our common stock underlying the performance share units reported in the preceding column, computed based on the closing price of our common stock on December |
| - 2023 Proxy Statement | 58 |
| (3) | The amounts in this row represent unvested restricted stock units and unvested performance share units for which the maximum applicable performance goals have been achieved held by each Named Executive Officer that vested or vest on the applicable remaining vesting dates as follows, subject to the Named Executive Officer’s continued employment: |
| Name | Award | Number Unvested on 12/31/2022 | Vesting Schedule | Remaining Vesting Dates | |||||
| Paul M. Rady | 2020 | 167,500 | Ratable | April 15, 2023 and April 15, 2024 | |||||
| 2021 RSU | 177,258 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (April) RSU | 134,637 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (October) RSU | 142,857 | Ratable | October 15, 2023, October 15, 2024, October 15, 2025 | ||||||
| 2020 Absolute TSR PSU | 125,624 | Vest in full | April 15, 2023 | ||||||
| 2020 Relative TSR PSU | 125,624 | Vest in full | April 15, 2023 | ||||||
| 2021 Absolute TSR PSU | 59,086 | Vest in full | April 15, 2024 | ||||||
| 2021 Net Debt to | 157,562 | Vest in full | December 31, 2023 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 44,880 | Vest in full | December 31, 2024 | ||||||
| Michael N. Kennedy | 2020 | 446,305 | Ratable | January 20, 2023 | |||||
| 2021 RSU | 39,391 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (April) RSU | 46,060 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (October) RSU | 48,872 | Ratable | October 15, 2023, October 15, 2024, October 15, 2025 | ||||||
| 2021 Absolute TSR PSU | 13,130 | Vest in | April 15, 2024 | ||||||
| 2021 Net Debt to EBITDAX PSU | 35,012 | Vest in full | December 31, 2024 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 15,354 | Vest in full | December 31, 2024 | ||||||
| W. Patrick Ash | 2019 RSU | 5,821 | Ratable | April 15, 2023 | |||||
| 2020 RSU | 348,676 | Ratable | January 20, 2023 | ||||||
| 2021 RSU | 39,391 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (April) RSU | 36,848 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (October) RSU | 39,098 | Ratable | October 15, 2023, October 15, 2024, October 15, 2025 | ||||||
| 2021 Absolute TSR PSU | 13,130 | Vest in full | April 15, 2024 | ||||||
| 2021 Net Debt to EBITDAX PSU | 35,012 | Vest in full | December 31, 2024 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 12,284 | Vest in full | December 31, 2024 | ||||||
| Yvette K. Schultz | 2019 RSU | 5,821 | Ratable | April 15, 2023 | |||||
| 2020 RSU | 43,394 | Ratable | April 15, 2023 and April 15, 2024 | ||||||
| 2021 RSU | 19,695 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (April) RSU | 35,430 | Ratable | April 15, 2023, April 15, 2024 and April 15, 2025 | ||||||
| 2022 (October) RSU | 37,594 | Ratable | October 15, 2023, October 15, 2024, October 15, 2025 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 11,810 | Vest in full | December 31, 2024 |
| - |
| (4) | This row includes outstanding performance share units as set forth below. The amounts included in the |
| Award | Number of Unvested PSUs on 12/31/2022 | Reported Performance Level | Applicable Performance Period and Performance Period End Date | ||||||
| Paul M. Rady | 2020 Absolute TSR PSU | 41,875 | Target | One-year performance period ending April 15, 2023 | |||||
| 2020 Absolute TSR PSU | 62,812 | Maximum | Three-year performance period ending April 15, 2023 | ||||||
| 2020 Relative TSR PSU | 62,812 | Maximum | One-year performance period ending April 15, 2023 | ||||||
| 2020 Relative TSR PSU | 62,812 | Maximum | Three-year performance period ending April 15, 2023 | ||||||
| 2021 Absolute TSR PSU | 29,543 | Target | One-year performance period ending April 15, 2023 | ||||||
| 2021 Absolute TSR PSU | 29,543 | Target | One-year performance period ending April 15, 2024 | ||||||
| 2021 Absolute TSR PSU | 59,086 | Maximum | Three-year performance period ending April 15, 2024 | ||||||
| 2021 Net Debt to | 39,391 | Target | One-year performance period ending December 31, | ||||||
| 2022 (April) Absolute TSR | 16,830 | Target | One-year performance period ending April 15, | ||||||
| 2022 | 16,830 | Target | One-year performance period ending April 15, | ||||||
| 2022 (April) Absolute TSR | 16,829 | Target | One-year performance period | ||||||
| 2022 (April) Absolute TSR PSU | 16,829 | Target | Three-year performance period | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 22,439 | Target | One-year performance period | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 22,439 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 17,857 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Absolute TSR PSU | 17,857 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 17,857 | Target | One-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Absolute TSR PSU | 17,858 | Target | Three-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 23,809 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 23,809 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 23,810 | Target | One-year performance period ending December 31, 2025 |
| - 2023 Proxy Statement | 60 |
| Name | Award | Number of Unvested PSUs on 12/31/2022 | Reported Performance Level | Applicable Performance Period and Performance Period End Date | |||||
| Michael N. Kennedy | 2021 Absolute TSR PSU | 6,565 | Target | One-year performance period ending | |||||
| 2021 Absolute TSR PSU | 6,565 | Target | One-year performance period | ||||||
| 2021 Absolute TSR | 13,130 | Maximum | Three-year performance period | ||||||
| 2021 Net Debt to EBITDAX PSU | 8,754 | Target | One-year performance period | ||||||
| 2022 (April) Absolute TSR PSU | 5,758 | Target | One-year performance period | ||||||
| 2022 (April) Absolute TSR PSU | 5,758 | Target | One-year performance period | ||||||
| 2022 (April) Absolute TSR PSU | 5,757 | Target | One-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Absolute TSR PSU | 5,757 | Target | Three-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 7,677 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 7,676 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 6,109 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Absolute TSR PSU | 6,109 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 6,109 | Target | One-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Absolute TSR PSU | 6,109 | Target | Three-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 8,146 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 8,145 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 8,145 | Target | One-year performance period ending December 31, 2025 | ||||||
| W. Patrick Ash | 2021 Absolute TSR PSU | 6,565 | Target | One-year performance period ending April 15, 2023 | |||||
| 2021 Absolute TSR PSU | 6,565 | Target | One-year performance period ending April 15, 2024 | ||||||
| 2021 Absolute TSR PSU | 13,130 | Maximum | Three-year performance period ending April 15, 2024 | ||||||
| 2021 Net Debt to EBITDAX PSU | 8,754 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (April) Absolute TSR PSU | 4,606 | Target | One-year performance period ending April 15, 2023 | ||||||
| 2022 (April) Absolute TSR PSU | 4,606 | Target | One-year performance period ending April 15, 2024 | ||||||
| 2022 (April) Absolute TSR PSU | 4,606 | Target | One-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Absolute TSR PSU | 4,606 | Target | Three-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 6,141 | Target | One-year performance period ending December 31, 2023 |
| - 2023 Proxy Statement | 61 |
| Name | Award | Number of Unvested PSUs on 12/31/2022 | Reported Performance Level | Applicable Performance Period and Performance Period End Date | |||||
| 2022 (April) Net Debt to EBITDAX PSU | 6,141 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 4,887 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Absolute TSR PSU | 4,887 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 4,888 | Target | One-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Absolute TSR PSU | 4,887 | Target | Three-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,516 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,516 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,516 | Target | One-year performance period ending December 31, 2025 | ||||||
| Yvette K. Schultz | 2022 (April) Absolute TSR PSU | 4,429 | Target | One-year performance period ending April 15, 2023 | |||||
| 2022 (April) Absolute TSR PSU | 4,429 | Target | One-year performance period ending April 15, 2024 | ||||||
| 2022 (April) Absolute TSR PSU | 4,429 | Target | One-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Absolute TSR PSU | 4,428 | Target | Three-year performance period ending April 15, 2025 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 5,905 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (April) Net Debt to EBITDAX PSU | 5,905 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 4,699 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Absolute TSR PSU | 4,699 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Absolute TSR PSU | 4,699 | Target | One-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Absolute TSR PSU | 4,700 | Target | Three-year performance period ending December 31, 2025 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,265 | Target | One-year performance period ending December 31, 2023 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,266 | Target | One-year performance period ending December 31, 2024 | ||||||
| 2022 (October) Net Debt to EBITDAX PSU | 6,266 | Target | One-year performance period ending December 31, 2025 |
| - 2023 Proxy Statement | 62 |
The following table provides information concerning equity awards that vested or were exercised by our Named Executive Officers during the 20202022 fiscal year.
| Option Awards(1) | Stock Awards | ||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | |||||
| Paul M. Rady | — | — | 42,818 | 59,089 | |||||
| Glen C. Warren, Jr. | — | — | 28,545 | 39,392 | |||||
| Alvyn A. Schopp | — | — | 10,665 | 14,704 | |||||
| Michael N. Kennedy | — | — | 10,665 | 14,704 | |||||
| W. Patrick Ash | — | — | 10,853 | 20,815 | |||||
| Option Awards(1) | Stock Awards | ||||||||
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | |||||
| Paul M. Rady | — | — | 1,167,284 | 41,818,780 | |||||
| Michael N. Kennedy | — | — | 622,414 | 14,020,092 | |||||
| W. Patrick Ash | — | — | 419,225 | 8,503,603 | |||||
| Yvette K Schultz | — | — | 82,518 | 2,898,534 | |||||
| (1) | There were no stock option exercises during the |
| (2) | This column reflects the number of restricted stock units and performance share units held by each Named Executive Officer that vested during the |
| (3) | The amounts reflected in this column represent the aggregate market value realized by each Named Executive Officer upon vesting of the restricted stock |
|
We do not provide pension benefits to our employees.
Nonqualified Deferred Compensation
We do not provide nonqualified deferred compensation benefits to our employees.
| - 2023 Proxy Statement | 63 |
Any unvested cash retention awards, restricted stock units, cash retention awards or unvested stock options subject to time-based vesting criteria granted to our Named Executive Officers under the Prior LTIP and the AR LTIP will become immediately fully vested (and, in the case of stock options granted under the Prior LTIP, fully exercisable to the extent not already fully exercisable) if the applicable Named Executive Officer’s employment with us terminates due to his death or “disability” or in the event of a “change in control” (as such terms are defined in the Prior LTIP or AR LTIP, as applicable). For performance share unit awards granted under the Prior LTIP, any continued employment conditions will be deemed satisfied on the date of the applicable Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” the performance period will end on the date of such termination of employment or “change in control,” and such performance share unitSuch awards will be settled based on the actual level of performance achieved as of such date. For performance share unit awards granted to Messrs. Rady and Warrenforfeited for zero consideration in 2020 under the AR LTIP, upon a Named Executive Officer’sconnection with all other termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share unit awards subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled.scenarios.
In addition, any continued employment conditions will be deemed satisfied for a prorated portion of any performance share units granted in 2019 on the date of a Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2019, for the 2018 awards or after April 15, 2020 for the 2019 awards and prior to the end of the applicable performance period, in each case, based on the number of completed 12-month periods during the applicable performance period. Such prorated portion will remain outstanding and eligible to vest at the end of the applicable performance period based on the actual level of performance achieved as of such date. With respect to the performance share units granted to Messrs. Rady and Warren in 2020 under the AR LTIP, the Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2021, will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved, (iii) the deemed ending of the three-year performance period applicable to
| 2020 Absolute TSR and Relative TSR Performance Share Units Granted Under the AR LTIP to Messrs. Rady and Kennedy: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2021, will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved, (iii) the deemed ending of the three-year performance period applicable to such performance share units as of the date of such termination of employment, and (iv) settlement of a prorated portion of the performance share units subject to such three-year performance period based on the actual level of performance achieved as of the date of such termination of employment. For the avoidance of doubt, if any one-year performance period applicable to such performance share units has not been completed as of the date of such termination of employment, the number of performance share units subject to such performance period will be forfeited for zero consideration as of the date of such termination of employment. | |
| • | 2021 Absolute TSR Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on | |
| - |
| the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | ||
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2022, will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved, (iii) the deemed ending of the three-year performance period applicable to such performance share units as of the date of such termination of employment, and (iv) settlement of a prorated portion of the performance share units subject to such three-year performance period based on the actual level of performance achieved as of the date of such termination of employment. For the avoidance of doubt, if such termination of employment occurs prior to April 15, 2022, then all performance share units will be forfeited for zero consideration as of the date of such termination of employment, and if any one-year performance period applicable to such performance share units has not yet begun as of the date of such termination of employment, the number of performance share units subject to such performance period will be forfeited for zero consideration as of the date of such termination of employment. | |
| • | 2021 Net Debt to EBITDAX Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs on or after December 31, 2021 will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved and (iii) forfeiture of all such performance share units subject to a performance period that has not yet begun or is not yet completed as of the date of such termination of employment for zero consideration. | |
| • | 2022 (April) Absolute TSR Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash and Ms. Schultz: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
such performance share units as of the date of such termination of employment, and (iv) settlement of a prorated portion of the performance share units subject to such three-year performance period based on the actual level of performance achieved as of the date of such termination of employment.
| - 2023 Proxy Statement | 65 |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2023, will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved, (iii) the deemed ending of the three-year performance period applicable to such performance share units as of the date of such termination of employment, and (iv) settlement of a prorated portion of the performance share units subject to such three-year performance period based on the actual level of performance achieved as of the date of such termination of employment. For the avoidance of doubt, if such termination of employment occurs prior to April 15, 2023, then all performance share units will be forfeited for zero consideration as of the date of such termination of employment, and if any one-year performance period applicable to such performance share units has not yet begun as of the date of such termination of employment, the number of performance share units subject to such performance period will be forfeited for zero consideration as of the date of such termination of employment. | |
| • | 2022 (April) Net Debt to EBITDAX Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash and Ms. Schultz: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” that occurs on or after December 31, 2022 will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved and (iii) forfeiture of all such performance share units subject to a performance period that has not yet begun or is not yet completed as of the date of such termination of employment for zero consideration. | |
| • | 2022 (October) Absolute TSR Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash and Ms. Schultz: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” will result in (i) the satisfaction of any continued | |
| - 2023 Proxy Statement | 66 |
| employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved, (iii) the deemed ending of the three-year performance period applicable to such performance share units as of the date of such termination of employment, and (iv) settlement of a prorated portion of the performance share units subject to such three-year performance period based on the actual level of performance achieved as of the date of such termination of employment and the number of completed one-year performance periods as of the date of such termination of employment. For the avoidance of doubt, if any one-year performance period applicable to such performance share units has not yet begun as of the date of such termination of employment, the number of performance share units subject to such performance period will be forfeited for zero consideration as of the date of such termination of employment, and if the first one-year performance period has not yet been completed as of the date of such termination of employment, the number of performance share units subject to the three-year performance period will be forfeited for zero consideration as of the date of such termination of employment. | ||
| • | 2022 (October) Net Debt to EBITDAX Performance Share Units Granted Under the AR LTIP to Messrs. Rady, Kennedy and Ash and Ms. Schultz: | |
| – | Upon a Named Executive Officer’s termination due to his death or “disability” or upon the occurrence of a “change in control,” (i) any continued employment conditions will be deemed satisfied on the date of such termination of employment or the “change in control” for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment or “change in control,” and such performance share units will be settled based on the actual level of performance achieved, (ii) any performance period that has begun but has not been completed will end on the date of such termination of employment or “change in control,” and the portion of the performance share units subject to such performance period will be settled based on the actual level of performance achieved as of such date, and (iii) the target number of performance share units that are subject to a performance period that has not yet begun as of the date of such termination of employment or “change in control” will be settled. | |
| – | The Named Executive Officer’s termination of employment for any reason other than for “cause” will result in (i) the satisfaction of any continued employment conditions for the portion of the performance share units subject to a performance period that has been completed as of the date of such termination of employment, (ii) settlement of the number of performance share units subject to a completed performance period based on the actual level of performance achieved and (iii) forfeiture of all such performance share units subject to a performance period that has not yet begun or is not yet completed as of the date of such termination of employment for zero consideration. | |
For purposes of the awards granted under the Prior LTIP and the AR LTIP, a Named Executive Officer will be considered to have incurred a “disability” if the executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of at least 12 months.
For purposes of the awards granted under the Prior LTIP, a “change in control” generally means the occurrence of any of the following events:
| • | A person or group of persons acquires beneficial ownership of 50% or more of either (a) the outstanding shares of our common stock or (b) the combined voting power of our voting securities entitled to vote in the election of directors, in each case with the exception of (i) any acquisition |
| - 2023 Proxy Statement | 67 |
| directly from us, (ii) any acquisition by us or any of our affiliates, or (iii) any acquisition by any employee benefit plan sponsored or maintained by us or any entity controlled by us; | |
| • | The incumbent members of the Board cease for any reason to constitute at least a majority of the Board; |
| • | The consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of our assets, or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) our outstanding common stock immediately prior to such Business Combination represents more than 50% of the outstanding common equity interests and the outstanding voting securities entitled to vote in the election of directors of the surviving entity, (B) no person or group of persons beneficially owns 20% or more of the common equity interests of the surviving entity or the combined voting power of the voting securities entitled to vote generally in the election of directors of such surviving entity, and (C) at least a majority of the members of the board of directors of the surviving entity were members of the incumbent Board at the time of the execution of the initial agreement or corporate action providing for such Business Combination; or |
| • | Approval by our stockholders of a complete liquidation or dissolution of the Company. |
For purposes of the awards granted under the AR LTIP, a “change in control” generally has the same meaning as given to such term in the Prior LTIP, except that the second prong of such definition has been clarified as follows:
| • | The incumbent members of the Board cease for any reason (other than death or disability) to constitute at least a majority of the Board; provided, however, that any |
For purposes of the 20182020, 2021 and 20192022 performance share unit awards granted under the Prior LTIP and the 2020 performance share unit awardsunits granted under the AR LTIP, “cause” shall mean a finding by the Compensation Committee of the executive’s: (i) final conviction of, or plea of nolo contendere to, a crime that constitutes a felony (or state law equivalent); (ii) gross negligence or willful misconduct in the performance of the executive’s duties that would reasonably be expected to have a material adverse economic effect on us or any of our affiliates; (iii) willful failure without proper legal reason to perform the executive’s duties; or (iv) a material breach of any material provision of the applicable award agreement or any other written agreement or corporate policy or code of conduct established by us or any of our affiliates that would reasonably be expected to have a material adverse economic effect on us or any of our affiliates.
| - |
The following table summarizes the compensation and other benefits that would have become payable to each Named Executive Officer, assuming such Named Executive Officer was terminated either (i) as a result of his death or disability or (ii) for any reason other than cause or a change in control of the Company, in each case, on December 31, 2020.2022. The restricted stock units, performance share units and, once exercised, the stock options represent a direct interest in shares of our common stock, which had a closing price on December 31, 2020,30, 2022, of $5.45$30.99 per share.
| Name | Cash Retention Awards ($) | Restricted Stock Units ($) | Performance Share Units ($) | Stock Options ($)(4) | Total ($) | |||||||||
| Paul M. Rady | ||||||||||||||
| Death; Disability | N/A | 1,906,819 | 3,705,913 | (1) | — | 5,612,732 | ||||||||
| Termination Other Than For Cause | N/A | N/A | 474,575 | (2) | — | 474,575 | ||||||||
| Change in Control | N/A | 1,906,819 | 3,705,913 | (3) | — | 5,612,732 | ||||||||
| Glen C. Warren, Jr. | ||||||||||||||
| Death; Disability | N/A | 784,348 | 1,495,306 | (1) | — | 2,279,654 | ||||||||
| Termination Other Than For Cause | N/A | N/A | 194,140 | (2) | — | 194,140 | ||||||||
| Change in Control | N/A | 784,348 | 1,495,306 | (3) | — | 2,279,654 | ||||||||
| Alvyn A. Schopp(5) | ||||||||||||||
| Death; Disability | 2,000,000 | 11,421,679 | 291,215 | (1) | — | 13,712,894 | ||||||||
| Termination Other Than For Cause | N/A | N/A | 97,070 | (2) | — | 97,070 | ||||||||
| Change in Control | 2,000,000 | 11,421,679 | 291,215 | (3) | — | 13,712,894 | ||||||||
| Michael N. Kennedy | ||||||||||||||
| Death; Disability | 800,000 | 7,317,072 | 226,497 | (1) | — | 8,343,569 | ||||||||
| Termination Other Than For Cause | N/A | N/A | 75,499 | (2) | — | 75,499 | ||||||||
| Change in Control | 800,000 | 7,317,072 | 226,497 | (3) | — | 8,343,569 | ||||||||
| W. Patrick Ash | ||||||||||||||
| Death; Disability | 500,000 | 5,850,875 | 64,713 | (1) | — | 6,415,588 | ||||||||
| Termination Other Than For Cause | N/A | N/A | 21,571 | (2) | — | 21,571 | ||||||||
| Change in Control | 500,000 | 5,850,875 | 64,713 | (3) | — | 6,415,588 | ||||||||
| Name | Cash Retention Awards ($) | Restricted Stock Units ($) | Performance Share Units ($) | Stock Options ($)(3) | Total ($) | |||||
| Paul M. Rady | ||||||||||
| Death; Disability; Change in Control(1) | N/A | 19,283,589 | 34,577,847 | — | 53,816,436 | |||||
| Termination Other Than For Cause | N/A | — | 19,103,552 | — | 19,103,552 | |||||
| Michael N. Kennedy | ||||||||||
| Death; Disability; Change in Control(1) | 266,667 | 17,993,662 | 5,543,944 | — | 23,804,273 | |||||
| Termination Other Than For Cause | — | — | 2,102,018 | — | 2,102,018 | |||||
| W. Patrick Ash | ||||||||||
| Death; Disability; Change in Control(1) | 166,667 | 14,560,156 | 4,935,087 | — | 19,661,910 | |||||
| Termination Other Than For Cause | — | — | 2,006,878 | — | 2,006,878 | |||||
| Yvette K. Schultz | ||||||||||
| Death; Disability; Change in Control(1) | N/A | 4,398,535 | 2,341,727 | — | 6,740,262 | |||||
| Termination Other Than For Cause | N/A | — | 365,992 | — | 365,992 |
| (1) |
| Award | Applicable Performance Period | Performance Level | Percentage of Award Eligible to Vest, Subject to Performance Specified in Column of this Table | |||
| 2020 Absolute TSR | One-year performance period | Actual performance achieved, or 150% | 100% | |||
| One-year performance period | Actual performance | |||||
| One-year performance period | Actual performance, | |||||
| Three-year performance period ending April 15, 2023 | Actual performance, which was trending at 150% on December 31, 2022 | |||||
| 2020 Relative TSR PSU | One-year performance period ended April 15, 2021 | Actual performance achieved, or 150% | ||||
| One-year performance period ended April 15, 2022 | Actual performance achieved, or 150% | |||||
| One-year performance period ending April 15, 2023 | Actual performance, which was trending at 150% on December 31, 2022 | |||||
| Three-year performance period ending April 15, 2023 | Actual performance, which was trending at 150% on December 31, 2022 | |||||
| 2021 Absolute TSR PSU | One-year performance period ended April 15, 2022 | Actual performance achieved, or 200% |
| - 2023 Proxy Statement | 69 |
| Award | Applicable Performance Period | Performance Level | Percentage of Award Eligible to Vest, Subject to Performance Specified in “Performance Level” Column of this | |||
| 2021 Absolute TSR PSU | One-year performance period ending April 15, 2023 | Actual performance, which was trending at | 100% | |||
| One-year performance period ending April 15, 2024 | Target performance, or 100% | |||||
| Three-year performance period ending April 15, 2024 | Actual performance, which was trending at 200% on December 31, 2022 | |||||
| 2021 Net Debt to EBITDAX PSU | One-year performance period ended December 31, 2021 | Actual performance achieved, or 200% | ||||
| One-year performance period ended December 31, 2022 | Actual performance achieved, or 200% | |||||
| One-year performance period ending December 31, 2023 | Target performance, or 100% | |||||
| 2022 (April) Absolute TSR PSU | One-year performance period ending April 15, 2023 | Actual performance, which was trending at 62% on December 31, 2022 | ||||
| One-year performance period ending April 15, 2024 | Target performance, or 100% | |||||
| One-year performance period ending April 15, 2025 | Target performance, or 100% | |||||
| Three-year performance period ending April 15, 2025 | Actual performance, which was trending at 62% on December 31, 2022 | |||||
| 2022 (April) Net Debt to EBITDAX PSU | One-year performance period ended December 31, 2022 | Actual performance achieved, or 200% | ||||
| One-year performance period ending December 31, 2023 | Target performance, or 100% | |||||
| One-year performance period ending December 31, 2024 | Target performance, or 100% | |||||
2022 (October) Absolute TSR PSU | One-year performance period ending December 31, 2023 | Target performance, or 100% | ||||
| One-year performance period ending December 31, 2024 | Target performance, or 100% | |||||
| One-year performance period ending December 31, 2025 | Target performance, or 100% | |||||
| Three-year performance period ending December 31, 2025 | Target performance, or 100% | |||||
| 2022 (October) Net Debt to EBITDAX PSU | One-year performance period ending December 31, 2023 | Target performance, or 100% | ||||
| One-year performance period ending December 31, 2024 | Target performance, or 100% | |||||
| One-year performance period ending December 31, 2025 | Target performance, or 100% |
| (2) | Upon a Named Executive Officer’s termination other than for cause on December 31, |
| - |
| Applicable Performance Period | Performance Level | Percentage of Award Eligible to Vest, Subject to Performance Specified in “ Performance Level” Column of this Table | ||||
| 2020 Absolute TSR PSU | One-year performance period ended April 15, 2021 | Actual performance achieved, or 150% | 100% because the applicable performance | |||
| One-year performance period | Actual performance achieved, or 150% | 100% because the | ||||
| One-year performance | N/A | 0% because such performance | ||||
| Three-year performance | Actual performance, which was trending at | 67% due to proration | ||||
| 2020 Relative TSR PSU | One-year performance period ended April 15, 2021 | Actual performance achieved, or 150% | 100% because the applicable | |||
| One-year performance period ended April 15, 2022 | Actual performance achieved, or 150% | 100% because the applicable performance period had been completed as of December 31, 2022 | ||||
| One-year performance period ending April 15, 2023 | N/A | 0% because such performance period had not yet been completed as of December 31, 2022 | ||||
| Three-year performance period ending April 15, 2023 | Actual performance, which was trending at 150% on December 31, 2022 | 67% due to proration | ||||
| 2021 Absolute TSR PSU | One-year performance period ended April 15, 2022 | Actual performance achieved, or 200% | 100% because the applicable performance period had been completed as of December 31, 2022 | |||
| One-year performance period ending April 15, 2023 | N/A | 0% because such performance period had not yet been completed as of December 31, 2022 | ||||
| One-year performance period ending April 15, 2024 | N/A | 0% because such performance period had not yet been completed as of December 31, 2022 | ||||
| Three-year performance period ending April 15, 2024 | Actual performance, which was trending at 200% on December 31, 2022 | 33% due to proration |
| - 2023 Proxy Statement | 71 |
| Award | Applicable Performance Period | Performance Level | Percentage of Award Eligible to Vest, Subject to Performance Specified in “ Performance Level” Column of this Table | |||
| 2021 Net Debt to EBITDAX PSU | One-year performance period ended December 31, 2021 | Actual performance achieved, or 200% | 100% because the applicable performance period had been completed as of December 31, 2022 | |||
| One-year performance period ended December 31, 2022 | Actual performance achieved, or 200% | 100% because the applicable performance period had been completed as of December 31, 2022 | ||||
| One-year performance period ending December 31, 2023 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| 2022 (April) Absolute TSR PSU | One-year performance period ending April 15, 2023 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | |||
| One-year performance period ending April 15, 2024 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| One-year performance period ending April 15, 2025 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| Three-year performance period ending April 15, 2025 | N/A | 0% because such performance period had not yet been completed as of December 31, 2022 | ||||
| 2022 (April) Net Debt to EBITDAX PSU | One-year performance period ended December 31, 2022 | Actual performance achieved, or 200% | 100% because the applicable performance period had been completed as of December 31, 2022 | |||
| One-year performance period ending December 31, 2023 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| One-year performance period ending December 31, 2024 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 |
| - 2023 Proxy Statement | 72 |
| Award | Applicable Performance Period | Performance Level | Percentage of Award Eligible to Vest, Subject to Performance Specified in “Performance Level” Column of this Table | |||
| 2022 (October) Absolute TSR PSU | One-year performance period ending December 31, 2023 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | |||
| One-year performance period ending December 31, 2024 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| One-year performance period ending December 31, 2025 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| Three-year performance period ending December 31, 2025 | N/A | 0% because such performance period had not yet been completed as of December 31, 2022 | ||||
| 2022 (October) Net Debt to EBITDAX PSU | One-year performance period ending December 31, 2023 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | |||
| One-year performance period ending December 31, 2024 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 | ||||
| One-year performance period ending December 31, 2025 | N/A | 0% because such performance period had not yet begun as of December 31, 2022 |
| (3) | Because (i) each of the Named Executive Officer’s stock options were fully vested on December 31, |
| - 2023 Proxy Statement | 73 |
The following table sets forth information about securities that may be issued under the existing equity compensation plans of the Company as of December 31, 2020.2022.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(1) | Weighted – average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||
| Equity compensation plans approved by security holders | |||||||||
| Antero Resources Corporation Long-Term Incentive Plan(2) | 8,439,336 | 50.64(3) | — | ||||||
| Antero Resources Corporation 2020 Long-Term Incentive Plan(2) | 2,973,320 | N/A(3) | 6,921,638 | ||||||
| Equity compensation plans not approved by security holders | — | — | — | ||||||
| TOTAL | |||||||||
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)(1) | Weighted – average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||||
| Equity compensation plans approved by security holders | ||||||||||||
| Antero Resources Corporation Long-Term Incentive Plan(2) | 1,414,425 | $50.86 | (3) | — | ||||||||
| Antero Resources Corporation 2020 Long- Term Incentive Plan(2) | 5,120,243 | N/A | (3) | 7,601,417 | ||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||
| TOTAL | 6,534,668 | — | 7,601,417 | |||||||||
| (1) | This column reflects the |
| (2) | The Prior LTIP was approved by our sole stockholder prior to our IPO and by our stockholders at the 2014 annual meeting of stockholders. The AR LTIP was approved by our stockholders at the 2020 annual meeting of stockholders. |
| (3) | The calculation of the weighted-average exercise price of outstanding options, warrants and rights under the Prior LTIP excludes restricted stock unit and performance share |
|
Chief Executive Officer Pay Ratio
Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, this section provides information regarding the relationship of the annual total compensation of all of our employees to the annual total compensation of our Chief Executive Officer, Mr. Rady. For 2020,2022, the median of the annual total compensation of all Company employees (other than our Chief Executive Officer), calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, was $97,851,$108,203, and the annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table, was $3,443,976.$24,641,821.
Based on this information, for 2020,2022, the ratio of the annual total compensation of Mr. Rady to the median of the annual total compensation of all of our employees was 35228 to 1.
We selected December 31, 2020,2022, as the date on which to determine our employee population for purposes of identifying the median of the annual total compensation of all of our employees (other than the Chief Executive Officer) because it was efficient to collect payroll data and other necessary information as of that date. As of December 31, 2020,2022, our employee population consisted of 521580 individuals, including all individuals employed by the Company or any of its consolidated subsidiaries, whether as full-time, part-time, seasonal or temporary workers. This population does not include independent contractors. All of our employees are located in the United States.
| - 2023 Proxy Statement | 74 |
In identifying our median employee in 2020,2022, we used the annual total compensation as reported in Box 1 of each employee’s Form W-2 for 20202022 provided to the Internal Revenue Service, minus the amount of each employee’s compensation that Antero Midstream reimbursed us for, calculated using the same methodology used to determine the 20202022 NEO AM Reimbursement Percentage, as described above under “Compensation Discussion and Analysis—Implementing Our Compensation Program Objectives—Role of the Antero Midstream Compensation Committee and Allocation of Compensation Expenses.” We believe this methodology provides a reasonable basis for determining the allocated portion of each employee’s total annual compensation, and is an economical method of evaluating the total annual compensation of our employees and identifying our median employee. For the 23110 employees hired during 2020,2022, we utilized the annual total compensation reported on each such employee’s Form W-2 for 20202022 without annualization adjustments, less the amount of such employee’s compensation that Antero Midstream reimbursed us for. No cost-of-living adjustments were made in identifying our median employee, as all of our employees (including our Chief Executive Officer) are located in the United States. This calculation methodology was consistently applied to our entire employee population, determined as of December 31, 2020,2022, to identify our median employee in 2020.2022. After we identified our median employee, we calculated each element of our median employee’s annual compensation for 20202022 in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K using the allocation methodology described above, which resulted in annual total compensation of $97,851.$108,203. The difference between our median employee’s total compensation reported on Form W-2 and our median employee’s annual total compensation calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K was $23,849.$22,067. This amount reflects the Company’s 401(k) match and non-cash imputed earnings offset by benefits deductible from gross income. Similarly, the 20202022 annual total compensation of our Chief Executive Officer was calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, as reported in the “Total” column of the Summary Compensation Table.
Pursuant to the amendments to Section 14(i) of the Exchange Act, Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, this section provides information regarding the relationship of compensation paid to our Named Executive Officers (“NEOs”) relative to our financial performance.
The following table summarizes compensation values reported in the Summary Compensation Table for our principal executive officer (“PEO”) and the average for our other NEOs, as compared to “compensation actually paid” or “CAP” and the Company’s financial performance for the years ended December 31, 2022, 2021, and 2020:
| Summary | Average Summary | Average | Value of Initial Fixed $100 Investment Based On: | |||||||||||||||||||||
| Year | Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Compensation Table Total for Non-PEO NEOs(1) | Compensation Actually Paid to Non-PEO NEOs(1)(2) | TSR | Peer Group TSR(3) | Net Income ($MM) | Total Net Debt ($MM)(4) | ||||||||||||||||
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | ||||||||||||||||
| 2022 | $ | 24,641,821 | $ | 65,573,452 | $ | 7,538,143 | $ | 14,955,404 | $ | 1,087 | $ | 244 | $ | 1,899 | $ | 1,183 | ||||||||
| 2021 | $ | 6,456,142 | $ | 34,006,228 | $ | 1,966,171 | $ | 12,904,483 | $ | 614 | $ | 161 | $ | (187) | $ | 2,125 | ||||||||
| 2020 | $ | 3,443,976 | $ | 8,091,318 | $ | 3,589,822 | $ | 7,758,258 | $ | 191 | $ | 76 | $ | (1,268) | $ | 3,002 | ||||||||
| The PEO reflected in columns (b) and (c) represents Paul M. Rady. The non-PEO NEOs reflected in columns (d) and (e) represent the following individuals by year: | |
| a. | 2022: Michael N. Kennedy, W. Patrick Ash and Yvette K. Schultz. | |
| b. | 2021: Alvyn A. Schopp, Michael N. Kennedy, W. Patrick Ash and Glen C. Warren, Jr. | |
| c. | 2020: Glen C. Warren, Jr., Alvyn A. Schopp, Michael N. Kennedy and W. Patrick Ash. | |
| (2) | The Company deducted from and added to the Summary Compensation Table total compensation the following amounts to calculate compensation actually paid in accordance with Item 402(v) of Regulation S-K as disclosed in columns (c) and (e) for each PEO and Non-PEO NEOs in each respective year. As the Company’s NEOs do not participate in any defined benefit plans, no adjustments were required to amounts reported in the Summary Compensation Table totals related to the value of benefits under such plans. | |
| - |
| 2022 | 2021 | 2020 | |||||||||||
| Paul Rady | Average Non-CEO NEOs | Paul Rady | Average Non-CEO NEOs | Paul Rady | Average Non-CEO NEOs | ||||||||
| Total Compensation from Summary Compensation Table | $24,641,821 | $7,538,143 | $6,456,142 | $1,966,171 | $3,443,976 | $3,589,822 | |||||||
| Adjustments for Equity Awards | |||||||||||||
| Grant date values in the Summary Compensation Table | ($21,853,164 | ) | ($6,402,576 | ) | ($4,791,874 | ) | ($905,123 | ) | ($1,948,025 | ) | ($2,869,804) | ||
| Year-end fair value of unvested awards granted in the current year | $22,425,955 | $6,570,392 | $11,392,963 | $2,151,981 | $4,051,825 | $6,505,081 | |||||||
| Year-over-year difference of year-end fair values for unvested awards granted in prior years | $16,449,231 | $5,071,243 | $20,572,120 | $8,406,250 | $2,606,484 | $554,010 | |||||||
| Fair values at vest date for awards granted and vested in current year | $0 | $0 | $0 | $0 | $0 | $0 | |||||||
| Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $23,909,609 | $2,178,202 | $401,404 | $1,681,030 | ($62,942 | ) | ($20,851) | ||||||
| Forfeitures during current year equal to prior year-end fair value | $0 | $0 | ($24,527 | ) | ($395,826 | ) | $0 | $0 | |||||
| Dividends or dividend equivalents not otherwise included in the total compensation | $0 | $0 | $0 | $0 | $0 | $0 | |||||||
| Total Adjustments for Equity Awards | $62,784,795 | $13,819,837 | $32,341,960 | $11,843,435 | $6,595,367 | $7,038,240 | |||||||
| Compensation Actually Paid (as calculated) | $65,573,452 | $14,955,404 | $34,006,228 | $12,904,483 | $8,091,318 | $7,758,258 | |||||||
| (3) | The peer group is comprised of the Alerian Midstream Energy Index. |
| (4) | A description of Total Net Debt can be found on page 44 of this Proxy Statement. |
Narrative Disclosure to Pay versus Performance Table
The illustrations below provide a graphical description of CAP and the following measures:
| • | the Company’s cumulative TSR and the Peer Group’s cumulative TSR; |
| • | the Company’s Net Income; and |
| • | the Company selected measure, which is Total Net Debt. |
| - 2023 Proxy Statement | 76 |
Disclosure of Most Important Performance Measures for Fiscal Year 2022
The measures listed below represent the most important financial performance measures that we used to determine CAP for fiscal year 2022.
| Most Important Performance Measures |
| D&C Capital |
| Average Net Production Volumes |
| Net Debt to EBITDAX |
| Total Net Debt |
| TSR |
| - 2023 Proxy Statement | 77 |
The Delaware General Corporation Law (“DGCL”) permits Delaware corporations to limit the personal liability of directors for monetary damages associated with breaches of the duty of care in limited circumstances, and our charter has always included those limitations. That protection did not extend to corporate officers under the DGCL or our charter. This has resulted in increased litigation and insurance costs for companies, which harms stockholders. Effective August 1, 2022, the Delaware legislature amended the DGCL to correct this inconsistent treatment between directors and officers. The DGCL now allows Delaware corporations to amend their certificates of incorporation, subject to stockholder approval, to limit the personal liability of certain officers for monetary damages associated with breaches of the fiduciary duty of care (but not the fiduciary duty of loyalty) in limited circumstances.
As provided in the new Delaware legislation, if the Company adopts the Exculpation Amendment, our Charter will permit officer exculpation only for direct claims brought by stockholders for breach of an officer’s fiduciary duty of care, including class actions, but would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by the Company itself or for derivative claims brought by stockholders in the name of the Company. The Exculpation Amendment would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. These limitations are similar to those already in the Charter for directors. The primary reason to adopt the Exculpation Amendment as further described below, is to strike a balance between stockholders’ interest in officer accountability and their interest in the Company being able to reduce litigation and insurance costs associated with frivolous lawsuits and heightened insurance premiums and attract and retain quality officers to work on its behalf.
The Board has unanimously approved and determined, subject to stockholder approval, that the Exculpation Amendment is advisable and in the best interests of the Company and our stockholders, and, in accordance with the DGCL, hereby seeks approval of the Exculpation Amendment by our stockholders.
Our Board believes that there is a need for directors and officers to be protected from the risk of financial ruin as a result of an unintentional misstep. Furthermore, the Exculpation Amendment: (i) is carefully drafted, consistent with the new Delaware law, to protect officers without limiting their liability for claims by the Company or for breaches of their duty of loyalty, (ii) would help the Company to attract and retain the most qualified officers and (iii) would reduce potential litigation and insurance costs associated with frivolous lawsuits and heightened premiums. The Board has additionally determined that the proposed provision would not materially and negatively impact stockholder rights. Thus, in light of the narrow class and type of claims for which officers’ liability would be exculpated, and the benefits that the Board believes would accrue to the Company and its stockholders in the form of an enhanced ability to attract and retain quality officers, the Board approved the Exculpation Amendment.
Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges. Limiting concern about personal risk for ordinary failures of care (but not loyalty) empowers both directors and officers to best exercise their business judgment in furtherance of stockholder interests. Furthermore, the Company expects its peers to adopt exculpation clauses that limit the personal liability of officers in their certificates of incorporation and failing to adopt the amendment could impact our recruitment and retention of exceptional officer
| - 2023 Proxy Statement | 78 |
candidates that conclude that the higher exposure to personal liabilities, costs of defense and other risks of proceedings exceeds the benefits of serving as an officer of the Company. It is also possible that insurance premiums for director and officer insurance could be increased for corporations that do not adopt exculpation clauses that limit the personal liability of officers in their governing documents, which could adversely affect the Company, and thereby adversely affect our stockholders.
Adopting the Exculpation Amendment would better position the Company to potentially reduce litigation and insurance costs associated with lawsuits (many of which may be frivolous) and heightened premiums, attract top officer candidates and retain our current officers and enable the officers to exercise their business judgment in furtherance of the interests of the stockholders without the potential for distraction posed by the risk of personal liability. This amendment will also more generally align the protections available to our officers with those already available to our directors. In view of the above considerations, our Board has unanimously determined to provide for the exculpation of officers as proposed.
The Board is asking our stockholders to approve the amendment to Article NINTH of our Charter. The text of the Exculpation Amendment is attached hereto as Appendix A, with additions marked with bold, underlined text and deletions indicated by strike-out text.
If the Exculpation Amendment is approved by our stockholders, the Exculpation Amendment will become effective upon the filing of a Certificate of Amendment with the Delaware Secretary of State, which filing is expected to occur as soon as reasonably practicable after the Annual Meeting. If the Exculpation Amendment is not approved by our stockholders, the Charter will not be amended, and no exculpation will be provided for our officers. The Company’s officers will nevertheless retain their existing rights under indemnification agreements and insurance policies.
 | THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FORTHE AMENDMENT TO ANTERO’S CHARTER TO REFLECT OFFICER EXCULPATION. |
| - 2023 Proxy Statement | 79 |
Beneficial Ownership
The following table sets forth information with respect to the beneficial ownership of our common stock as of April 22, 2021,10, 2023, by:
| • | each of our Named Executive Officers; |
| • | each of our directors and nominees; |
| • | all of our directors, director nominees and executive officers as a group; and |
| • | each person known to us to be the beneficial owner of more than 5% of our outstanding common stock. |
Except as otherwise noted, the persons or entities listed below have sole voting and investment power with respect to all shares of our common stock beneficially owned by them, except to the extent this power may be shared with a spouse. All information with respect to beneficial ownership has been furnished by the respective directors, officers or more than 5% stockholders, as the case may be. Unless otherwise noted, the mailing address of each person or entity named in the table is 1615 Wynkoop Street, Denver, Colorado, 80202.
| Common Stock Beneficially Owned | |||||
| Name and Address of Beneficial Owner | Number of Shares | Percentage of Class | |||
| The Vanguard Group, Inc.(1) | 22,472,797 | 7.44% | |||
| BlackRock, Inc.(2) | 19,992,547 | 6.62% | |||
| FPR Partners, LLC(3) | 17,777,559 | 5.89% | |||
| Paul M. Rady(4) | 15,158,435 | 5.02% | |||
| Glen C. Warren, Jr.(5) | 11,060,044 | 3.66% | |||
| Robert J. Clark(6) | 156,794 | * | |||
| Benjamin A. Hardesty(7) | 148,628 | * | |||
| W. Howard Keenan, Jr.(8) | 329,139 | * | |||
| Paul J. Korus | 102,640 | * | |||
| Jacqueline C. Mutschler | 44,993 | * | |||
| Vicky Sutil | 64,714 | * | |||
| Thomas B. Tyree, Jr. | 64,714 | * | |||
| W. Patrick Ash(9) | 210,992 | * | |||
| Michael N. Kennedy(10) | 343,475 | * | |||
| Alvyn A. Schopp(11) | 1,703,867 | * | |||
| Directors and executive officers as a group (12 persons) | 29,388,435 | 9.73% | |||
| Common Stock Beneficially Owned | ||||||
| Name and Address of Beneficial Owner | Number of Shares | Percentage of Class | ||||
| FMR LLC(1) | 43,747,490 | 14.06% | ||||
| The Vanguard Group, Inc.(2) | 26,562,257 | 8.54% | ||||
| BlackRock, Inc.(3) | 25,075,763 | 8.06% | ||||
| Paul M. Rady | 15,875,835 | 5.10% | ||||
| Robert J. Clark(5) | 74,535 | * | ||||
| Benjamin A. Hardesty(6) | 165,369 | * | ||||
| W. Howard Keenan, Jr.(7) | 352,938 | * | ||||
| Jacqueline C. Mutschler | 59,734 | * | ||||
| Brenda R. Schroer | 15,658 | * | ||||
| Vicky Sutil | 81,455 | * | ||||
| Thomas B. Tyree, Jr. | 81,455 | * | ||||
| W. Patrick Ash(8) | 439,534 | * | ||||
| Michael N. Kennedy(9) | 972,218 | * | ||||
| Yvette K. Schultz(10) | 46,022 | * | ||||
| Directors and executive officers as a group (10 persons) | 17,725,219 | 5.69% | ||||
| * | Less than one percent. |
| (1) | Based upon its Schedule 13G filed on February 9, 2023 with the SEC, FMR LLC, has a mailing address of 245 Summer Street, Boston, Massachusetts 02210. |
| (2) | Based upon its Schedule 13G/A filed on February |
| Based upon its Schedule 13G filed on February | |
| (4) | Includes 2,822,552 shares of common stock held by Salisbury Investment Holdings LLC (“Salisbury”) and 2,461,712 shares of common stock held by Mockingbird Investments LLC (“Mockingbird”). Mr. Rady owns a 95% limited liability company interest in Salisbury and his spouse owns the remaining 5%. Mr. Rady owns a 13.1874% limited liability company interest in Mockingbird, and two trusts under his control own the remaining 86.8126%. Mr. Rady disclaims beneficial ownership of all shares held by Salisbury and Mockingbird except to the extent of his pecuniary interest therein. Does not include |
|
| Includes options to purchase 1,477 shares of common stock that expire ten years from the date of grant, or October 10, 2023, and options to purchase 1,526 shares of common stock that expire ten years from the date of grant, or October 16, 2024. | |
| Includes options to purchase 1,477 shares of common stock that expire ten years from the date of grant, or October 10, 2023, and options to purchase 1,526 shares of common stock that expire ten years from the date of grant, or October 16, 2024. |
| - 2023 Proxy Statement | 80 |
| (7) | Has a mailing address of 410 Park Avenue, 19th Floor, New York, New York 10022. Includes options to purchase 1,477 shares of common stock that expire ten years from the date of grant, or October 10, 2023, and options to purchase 1,526 shares of common stock that expire ten years from the date of grant, or October 16, 2024. Mr. Keenan is a member and manager of Yorktown VIII Associates LLC, the |
| Does not include | |
| Does not include | |
| Does not include |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act and related rules of the SEC require our directors and Section 16 officers, and persons who own more than 10% of a registered class of our equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. These persons are required by SEC regulations to furnish us with copies of all Section 16(a) reports that they file. We assist our directors and executive officers in making their Section 16(a) filings, pursuant to powers of attorney granted by our insiders, based on information obtained from them and our records.
DELINQUENT SECTION 16(A) REPORTS
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Antero during 2020,2022, including those reports we have filed on behalf of our directors and Section 16 officers pursuant to powers of attorney, no person subject to Section 16 ofthere was one untimely Form 3 filing made during 2022 by Yvette K. Schultz as a result in a delay in obtaining EDGAR filing codes from the Exchange Act failed to file on a timely basis during 2020, except that Forms 4 filed with respect to the quarterly awards granted to each of our non-employee directors on October 10, 2020 were not timely.SEC.
| - |
RELATED PERSON TRANSACTIONS
General
The Audit Committee is charged with reviewing the material facts of related person transactions that do not involve Antero Midstream or its subsidiaries.subsidiaries (other than the Company and its subsidiaries). The Board, or, if so delegated by the Board, the Conflicts Committee, is charged with reviewing the material facts of related person transactions involving Antero Midstream and its subsidiaries.subsidiaries (other than the Company and its subsidiaries). The Audit Committee, the Board, or the Conflicts Committee, as applicable, either approves or disapproves of Antero’s participation in such transactions under Antero’s Related Persons Transaction Policy adopted by the Board (“RPT Policy”), which pre-approves certain transactions that are not deemed to be related person transactions pursuant to Item 404 of Regulation S-K.
The Audit Committee has the authority to modify the RPT Policy regarding pre-approved transactions or to establish guidelines for Antero to participate in any ongoing related person transaction.
For all related person transactions during 20202022 that were required to be reported in “Related Persons Transactions,” the procedures described above were followed unless the RPT Policy did not require review, approval or ratification of the transaction.
Agreements with Antero Midstream Corporation
On October 9, 2018, concurrently with the execution of the Simplification Agreement, dated as of October 9, 2018 (the “Simplification Agreement”), by and among AMGP, Antero Midstream Partners LP (“Antero Midstream Partners”) and certain of Antero’s and their affiliates (the “Simplification Agreement”), certain affiliates of Warburg Pincus LLC and Yorktown Partners LLC (collectively, the “Sponsor Holders”); AMGP; a wholly-owned subsidiary of the Company (“AR Sub”); and Paul M. Rady, Glen C. Warren, Jr. and certain of their respective affiliates (collectively, the “Management Stockholders”) entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”), which became effective as of the Closing and which governs certain rights and obligations of the parties following the consummation of the Simplification Transactions. The Sponsor Holders and the Management Stockholders no longer have rights under the Stockholders’ Agreement because they no longer hold the requisite number of shares of common stock of Antero Midstream, par value $0.01 per share (“Antero Midstream Common Stock”).
Under the Stockholders’ Agreement, and subject to additional limitations in the event of a Fundamental Change (as defined in the Stockholders’ Agreement), AR Sub is entitled to designate two directors, who initially were Mr. Rady and Mr. Warren, for nomination and election to the Antero Midstream Board for so long as, together with its affiliates, AR Sub owns an amount of shares equal to at least 8% of the qualifying Antero Midstream Common Stock and one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common Stock. EffectiveOn April 30, 2021, Mr. Warren will be retiringretired from the Board and the Antero Midstream Board and, in connection with his retirement, AR Sub has designated Michael N. Kennedy as its replacement director to serve on the Antero Midstream Board to fill the resulting vacancy. Mr. Kennedy will also standstood for election at Antero Midstream’s 2021 annual meeting of stockholders as AR Sub’s director nominee.
The Sponsor Holders and the Management Stockholders were previously entitled to certain director designation rights, but they no longer hold the requisite amount of Antero Midstream Common Stock. Notwithstanding the foregoing, upon the occurrence of a Fundamental Change, AR Sub will be entitled to designate one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common Stock.
|
Pursuant to the Stockholders’ Agreement, AR Sub agreed to vote all of its shares of Antero Midstream Common Stock, at AR Sub’s election,
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either (i) in favor of any other nominees nominated by the Nominating & Governance Committee of the Antero Midstream Board or (ii) in proportion to the votes cast by the public stockholders of Antero Midstream in favor of such nominees. In calculating the 8% and 5% ownership thresholds for purposes of the Stockholders’ Agreement, qualifying Antero Midstream Common Stock is determined by dividing the Antero Midstream Common Stock ownership for AR Sub as of the applicable measurement date by (i) the total number of outstanding shares of Antero Midstream Common Stock at the Closing or (ii) the total number of outstanding shares on the applicable measurement date, whichever is less. Pursuant to the terms of the Stockholders’ Agreement, no more than 45% of the shares of Antero Midstream Common Stock outstanding as of closing of the Simplification Transactions will be subject to the obligations of the Stockholders’ Agreement.
In addition, under the Stockholders’ Agreement, for so long as AR Sub has the right to designate at least one director, (i) if Mr. Rady is an executive officer of Antero, he shall serve as Chief Executive Officer at Antero Midstream and (ii) if Mr. Warren is an executive officer of Antero, he shall serve as President at Antero Midstream, and both Mr. Rady and Mr. Warren shall be subject to removal from such officer positions at Antero Midstream only for cause. For so long as Mr. Rady is a member of the Antero Midstream Board and is an executive officer of Antero and/or Antero Midstream, the parties have agreed that he shall serve as Chairman of the Antero Midstream Board, subject to his removal as Chief Executive Officer of Antero Midstream for cause. The Stockholders’ Agreement terminates as to each stockholder upon the time at which such stockholder no longer has the right to designate an individual for nomination to the Antero Midstream Board pursuant to the Stockholders’ Agreement.
Antero entered into a Registration Rights Agreement (the “Antero Midstream Registration Rights Agreement”), dated as of March 12, 2019, with Antero Midstream, pursuant to which Antero Midstream agreed to register the resale of certain shares of Antero Midstream Common Stock held by Antero, under certain circumstances.
Specifically, pursuant to the Antero Midstream Registration Rights Agreement, Antero Midstream took effective a registration statement under the Securities Act that permits the resale of the Registrable Securities (as defined in the Antero Midstream Registration Rights Agreement) from time to time as permitted by Rule 415 of the Securities Act (or any similar provision adopted by the SEC then in effect) (the “Resale Registration Statement”). Except in certain circumstances, Sponsor Holders (as defined in the Antero Midstream Registration Rights Agreement), which includes Antero and Paul M. Rady, and Glen C. Warren, owning at least 3% of the issued and outstanding shares of Antero Midstream Common Stock have the right to require Antero Midstream to facilitate an underwritten offering. Antero Midstream is not obligated to effect any demand registration in which the anticipated aggregate offering price is less than $50.0 million. Sponsor Holders will also have customary piggyback registration rights to participate in underwritten offerings.
Pursuant to our gasAntero Resources has gathering and compression service agreements with Antero Midstream that include: (i) the second amended and restated gathering and compression agreement dated December 8, 2019 (the “2019 gathering and compression agreement”), (ii) gathering and compression agreements from Antero Midstream’s acquisition of certain Marcellus gathering and compression assets from Crestwood Equity Partners LP (the “Marcellus gathering and compression agreements”) and (iii) a compression agreement from Antero Midstream’s acquisition of certain Utica compressors from EnLink Midstream LLC (the “Utica compression agreement” and, together with the 2019 gathering and compression agreement and the Marcellus gathering and compression agreements, the “gathering and compression agreements”). Pursuant to the gathering and compression agreements with Antero Midstream, we have agreed to dedicateAntero Resources has dedicated substantially all of ourits current and future acreage in West Virginia, Ohio and Pennsylvania to Antero Midstream (other thanfor gathering and compression services. The 2019 gathering and compression agreement has an initial term through 2038, the existing third-party commitments), so long as such production is not otherwise subject to a pre-existing dedication to third-partyMarcellus gathering systems. Our production subject to a pre-existing dedication will beand compression agreements expire between 2024 and 2031, and the
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Utica compression agreement has two dedicated toareas that expire in 2023 and 2030. Upon expiration of each of the Marcellus gathering and compression service agreements and the Utica compression agreement, Antero Midstream atwill continue to provide gathering and compression services under the expiration of such pre-existing dedication. In addition, if we acquire any2019 gathering facilities, we are required to offer such gathering facilities to Antero Midstream at our cost.and compression agreement.
Under the 2019 gathering and compression agreement, Antero Midstream was initiallyis entitled to receive a low-pressure gathering fee of $0.30 per Mcf, a high-pressure gathering fee of $0.18 per Mcf, a compression fee of $0.18 per Mcf, and a condensate
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gathering fee of $4.00 per Bbl, which, in each case, has been subject to CPI-based adjustments. If, and to the extent we request that Antero Midstream construct new high-pressure lines and compressor stations, the 2019 gathering and compression agreement contains minimum volume commitments that require us to utilize or pay for 75% and 70%, respectively, of the capacity of such new construction. Additional high-pressure lines and compressor stations installed on Antero Midstream’s own initiative are not subject to such volume commitments. These minimum volume commitments on new infrastructure, as well as price adjustment mechanisms, are intended to support the stability of Antero Midstream’s cash flows.
Antero Midstream also has an option to gather and compress natural gas produced by us on any acreage Antero acquires in the future outside of West Virginia, Ohio and Pennsylvania on the same terms and conditions.conditions as the 2019 gathering and compression agreement. In the event that Antero Midstream does not exercise this option, we will be entitled to obtain gathering and compression services and dedicate production from limited areas to such third-party agreements from third parties.
In return for our acreage dedication, Antero Midstream has agreed to gather, compress, dehydrate and redeliver all of our dedicated natural gas on a firm commitment, first-priority basis. Antero Midstream may perform all services under the 2019 gathering and compression agreement or it may perform such services through third parties. In the event that Antero Midstream does not perform its obligations under the 2019 gathering and compression agreement, we will be entitled to certain rights and procedural remedies thereunder. In addition, Antero Midstream has the right to elect to be paid for certain services under the 2019 gathering and compression agreement on a cost of service basis designed to generate a specified rate of return.
Pursuant to the 2019 gathering and compression agreement, Antero Midstream has also agreed to build to and connect all of our wells producing dedicated natural gas, subject to certain exceptions, upon 180 days’ notice by us. In the event of late connections, our natural gas will temporarily not be subject to the dedication. Antero Midstream is entitled to compensation under the 2019 gathering and compression agreement for capital costs incurred if a well does not commence production within 30 days following the target completion date for the well set forth in the notice from us.
Antero Midstream has agreed to install compressor stations at our direction, but will not be responsible for inlet pressures or for pressuring natural gas to enter downstream facilities if we have not directed Antero Midstream to install sufficient compression. Additionally, Antero Midstream will provide high-pressure gathering pursuant to the gathering and compression agreement.agreements.
Under the 2019 gathering and compression agreement and the Marcellus gathering and compression agreement, we may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication, provided that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated properties previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate number of net acres of dedicated properties acquired by us since such effective date. Accordingly, under certain circumstances, we may dispose of a significant number of net acres of dedicated properties free from dedication without Antero Midstream’s consent.
After the completion of the initial term, which, as described below, was extended to November 2038, 2019 the gathering and compression agreement will continue in effect from year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement, by either Antero Midstream or us on or before the 180th day prior to the anniversary of such effective date.
On February 23, 2018, the gathering and compression agreement was amended to make clarifying changes with respect to the consumer price index (“CPI”) and other associated fee adjustments.
On December 8, 2019, the 2019 gathering and compression agreement was amended such that, Antero Midstream will rebate us: (i) $12 million for each quarter in 2020 that Antero Midstream receives gathering fees on average daily volumes in excess of certain thresholds; and (ii) for each quarter in 2021, 2022 and 2023 (a) $12.0 million for each quarter
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that the Antero Midstream receives gathering fees on average daily volumes between 2,900 MMcfe/d and 3,150 MMcfe/d, (b) $15.5 million for each quarter that Antero Midstream receives gathering fees on average daily volumes between 3,150 MMcfe/d and 3,400 MMcfe/d, and (c) $19.0 million for each quarter that Antero Midstream receives gathering fees on average daily volumes exceeding 3,400 MMcfe/d. Such amendment also extended the original 20-year initial term by four years to 2038. We achieved the threshold in all such thresholds in 2020four quarters of 2022 and the first quarter of 20212023 and received $48 million andearned $12 million respectively, in such periodseach period from Antero Midstream.
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ProcessingFor the year ended December 31, 2022, Antero Resources paid approximately $738 million in fees under the gathering and compression agreements.
On February 6, 2017, a joint venture was formed between Antero Midstream and MarkWest Energy Partners, L.P. (“MarkWest”), a wholly-owned subsidiary of MPLX, LP (the “Joint Venture”), to develop processing and fractionation assets in Appalachia. Antero Midstream and MarkWest each own a 50% interest in the Joint Venture and MarkWest operates the Joint Venture assets. The Joint Venture assets consist of processing plants in West Virginia and a one-third interest in a recently commissioned MarkWest fractionator in Ohio.
Pursuant to a gas processing agreement between us and MarkWest, MarkWest has agreed to process gas from acreage dedicated by us for a fee. MarkWest has entered into a separate agreement with the Joint Venture whereby the Joint Venture has agreed to perform gas processing services with respect to certain volumes on behalf of MarkWest in exchange for the gas processing fees that MarkWest receives from us in connection with such volumes (the “MW-JV Arrangement”). During the year ended December 31, 2020,2022, the Joint Venture derived approximately $228$258 million of revenues from us under the MW-JV Arrangement. In addition, on February 6, 2018, we and MarkWest entered into an agreement pursuant to which MarkWest agreed to address certain regulatory matters related to expansions at one of MarkWest’s processing sites, and if certain conditions are not met, we have agreed to make reimbursement payments for such work directly to the Joint Venture.
On November 10, 2014, we entered into a right of first offer agreement with Antero Midstream for gas processing services pursuant to which we agreed, subject to certain exceptions, not to procure any gas processing or NGLs fractionation services with respect to our production (other than production subject to a pre-existing dedication) without first offering Antero Midstream the right to provide such services. On February 6, 2017, in connection with the formation of the Joint Venture,
we and Antero Midstream amended and restated the right of first offer agreement to, among other things, amend the list of conflicting dedications set forth in such agreement to include the gas processing arrangement between us and MarkWest. On February 13, 2018, we further amended and restated the right of first offer agreement to make certain clarifying changes to reflect the original intent of the agreement.
On September 23, 2015, we entered into a water services agreement with Antero Midstream, pursuant to which Antero Midstream agreed to provide through certain of its subsidiaries certain water handling and treatment services to us within an area of dedication in defined service areas in Ohio and West Virginia, and we have agreed to pay fees for those services on a monthly basis. The initial term of the water services agreement is twenty years, automatically renewable from year to year thereafter.
Under the water services agreement, we committed to pay a fee on a minimum volume of fresh water deliveries through 2019, which commitments have since expired in accordance with the terms of the water services agreement. Fees payable to Antero Midstream under the water services agreement are based on the volume of fresh water deliveries thereunder and the services provided by Antero Midstream thereunder. We also agreed to pay Antero Midstream a fixed fee per barrel for wastewater
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treatment at Antero Midstream’s wastewater treatment facility, which was idled in the third quarter of 2019, and a fee per barrel for wastewater collected in trucks owned by Antero Midstream, in each case subject to annual CPI-based adjustments. In addition, Antero Midstream contracts with third-party service providers to provide us other fluid handling services including flow back and produced water services and we will reimburse Antero Midstream for its third-party out-of-pocket costs plus 3%. In addition to the foregoing, Antero Midstream has the right to elect to be paid for certain services under the water services agreement on a
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cost of service basis designed to generate a specified rate of return. For the year ended December 31, 2020,2022, we incurred approximately $260$245 million in fees under the water services agreement.
Under the water services agreement, we may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication, provided that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated properties previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate number of net acres of dedicated properties acquired by us since such effective date. Accordingly, under certain circumstances, we may dispose of a significant number of net acres of dedicated properties free from dedication without Antero Midstream’s consent.
On February 12, 2019, we and Antero Midstream amended and restated the water services agreement to, among other things, make certain clarifying changes with respect to the CPI and the associated adjustments to the fees Antero Midstream will receive from us under the water services agreement.
In 2019, we entered into the Amended and Restated Secondment Agreement with Antero Midstream. Under this agreement, we agreed to provide seconded employees to Antero Midstream to perform certain operational services with respect to the gathering and compression, processing, and NGLs fractionation facilities and water assets, including serving as common paymaster with respect to the seconded employees, and Antero Midstream agreed to reimburse us for expenditures we incur performing those operational services. The initial term of the agreement runs through November 2034, automatically renewable from year to year thereafter. For the year ended December 31, 2020,2022, Antero Midstream reimbursed us for approximately $7$13 million of direct and indirect costs and expenses incurred on its behalf pursuant to the secondment agreement.
In 2019, we entered into the Second Amended and Restated Services Agreement with Antero Midstream, pursuant to which we agreed to provide certain corporate, general and administrative services to Antero Midstream, including serving as common paymaster, in exchange for reimbursement of any direct and indirect costs and expenses associated with providing such services. The initial term of this agreement runs through November 2034, automatically renewable from year to year thereafter. For the year ended December 31, 2020,2022, Antero Midstream reimbursed us for approximately $25$31 million of direct and indirect costs and expenses incurred on its behalf pursuant to the services agreement.
Pursuant to a license agreement with Antero Midstream, Antero Midstream has the right to use certain Antero-related names and trademarks in connection with the operation of its midstream business.
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From time to time, in the ordinary course of business, we participate in transactions with Antero Midstream and other third parties in which Antero Midstream may be deemed to have a direct or indirect material interest. These transactions include, among other things, agreements that address the receipt of midstream services and provision of contract operating services; the sale of fuel for use in Antero Midstream’s operations; the release of midstream service dedications in connection with acquisitions, dispositions or exchanges of acreage; consent to the extension of existing services being provided by third parties; the construction of certain pipelines and facilities; and the acquisition of assets and the assumption of liabilities by us, our subsidiaries and our unconsolidated affiliates. While certain of these transactions are not the result of arm’s-length
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negotiations, we believe the terms of each of the transactions are, and specifically intend the terms to be, generally no more or less favorable to either party than those that could have been negotiated with unaffiliated parties with respect to similar transactions. During the year ended December 31, 2020,2022, we paid $8an aggregate of $12.7 million in expenses to Antero Midstream and received no payments from Antero Midstream in connection with such transactions.
Employment
Timothy Rady, Senior Vice President—Land of Antero Resources and the son of Paul M. Rady, the Chairman, and Chief Executive Officer and President of Antero, provided services to us in 2020.2022. Total compensation paid to Timothy Rady and allocated to Antero in 20202022 consisted of base salary, bonus and other benefits totaling $257,997$390,833 and award grants under the AR LTIP having an aggregate grant date fair value of $222,611,$1,234,197, which are subject to certain time-based vesting conditions.
QUORUM AND VOTING
Voting Stock
Antero’s common stock is the only outstanding class of securities that entitles holders to vote generally at meetings of Antero’s stockholders. Each share of common stock outstanding on the record date entitles the holder to one vote at the Annual Meeting. Stockholders do not have the right to cumulate their votes for election of Directors.
Quorum
The presence, in person, online or by proxy, of the holders of a majority in voting power of the votes eligibleoutstanding shares entitled to be castvote at the Annual Meeting is necessary to constitute a quorum. Abstentions and broker non-votes (described below) will be counted for purposes of determining whether a quorum is present at the Annual Meeting. If a quorum is not present, the chairman has the power to adjourn the Annual Meeting from time to time, without notice other than an announcement at the Annual Meeting, until a quorum is present. At any annual meeting reconvened following an adjournment at which a quorum is present, any business may be transacted that might have been transacted at the annual meeting as originally scheduled.
- 2023 Proxy Statement 87 Stockholder List
Antero will maintain at its corporate offices in Denver, Colorado a list of the stockholders entitled to vote at the Annual Meeting. The list will be open to the examination of any stockholder, for purposes germane to the Annual Meeting, during ordinary business hours for ten days before the Annual Meeting. In addition, the list of stockholders will be available during the Annual Meeting through the meeting website.
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Only stockholders of record at the close of business on April 20, 2021,17, 2023, have the right to vote at the Annual Meeting. The proposals at the Annual Meeting will require the following votes:
| Proposal | Vote required | Voting options | Can brokers vote without instructions? | Effect of abstentions, withheld votes and broker non-votes | ||||
| Election of directors | Each nominee must receive a plurality of the votes cast | For all nominees Withhold authority for all nominees For all except | No | Broker non-votes will not have any effect. | ||||
| Ratification of the selection of the independent registered public accounting firm | Affirmative vote of the holders of a majority of the voting power of the shares | For Against Abstain | Yes | Abstentions will have the effect of a vote “against.” There should not be broker non-votes. | ||||
| Advisory approval of the compensation of the Named Executive Officers | Affirmative vote of the holders of a majority of the voting power of the shares | For Against Abstain | No | Abstentions will have the effect of a vote “against.” Broker non-votes will not have any effect. | ||||
| Amendment to Antero’s amended and restated certificate of incorporation to reflect officer exculpation | Affirmative vote of the holders of 66 2/3% of the outstanding shares entitled to vote thereon | For Against Abstain | No | Abstentions and broker non-votes will have the effect of a vote “against.” |
An automated system that Broadridge Investor Communications Services administers will tabulate the votes.
Brokers who hold shares in street name for customers are required to vote those shares in accordance with instructions received from the beneficial owners. NYSE Rule 452 restricts when brokers that are record holders of shares may exercise discretionary authority to vote those shares in the absence of instructions from beneficial owners. When brokers are not permitted to vote on a matter without instructions from the beneficial owner, and do not receive such instructions, the result is a “broker non-vote.”
| * | Votes that are “withheld” from a director’s election will not affect the outcome of the vote on the election of a director. However, for a discussion of our Majority Vote Director Resignation Policy, please see “Corporate Governance—Majority Vote Director Resignation Policy.” |
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A proxy that is properly completed and returned will be voted at the Annual Meeting in accordance with the instructions on the proxy. If you properly complete and return a proxy, but do not indicate any contrary voting instructions, your shares will be voted in accordance with the Board’s recommendations, which are as follows:
| • | FOR the election of the |
| • | FOR the ratification of the selection of KPMG LLP as Antero’s independent registered public accounting firm for the fiscal year ending December 31, |
| • | FOR the approval, on an advisory basis, of the compensation of Antero’s Named Executive |
| • | FOR the approval of an amendment to Antero’s Charter to reflect new Delaware law provisions regarding officer exculpation. |
If any other business properly comes before the stockholders for a vote at the Annual Meeting, your shares will be voted at the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated herein, to be presented for consideration at the Annual Meeting.
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Stockholders of record may revoke their proxy at any time before the electronic polls close by submitting a later-dated vote via the Internet, by telephone or by mail; by delivering instructions to Antero’s Secretary before the Annual Meeting commences; or by voting online in person during the Annual Meeting. Beneficial stockholders may revoke any prior voting instructions by contacting the broker, bank, or other nominee that holds their shares prior to the Annual Meeting or by voting online during the meeting.
Solicitation Expenses
We will bear all costs incurred in the solicitation of proxies, including the preparation, printing and mailing of the Notice of Annual Meeting and Proxy Statement and the related materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally or by telephone, e-mail, facsimile or other means, without additional compensation. We have retained MacKenzie Partners, Inc. (“MacKenzie”) to aid in the solicitation of proxies for an estimated fee of approximately $22,500 and the reimbursement of out-of-pocket expenses. We have also agreed to indemnify MacKenzie and its representative against certain losses that arise or relate to Mackenzie’s engagement for the solicitation of proxies.
Upon written request, we will provide any stockholder, without charge, a copy of the Form 10-K, but without exhibits. Stockholders should direct requests to Antero Resources Corporation, 1615 Wynkoop Street, Denver, Colorado 80202. Our Form 10-K and the exhibits filed or furnished therewith are available on our website, www.anteroresources.com, in the “SEC Filings” subsection of the “Investors” section.
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ADDITIONAL INFORMATION
Proxy Materials, Annual Report and Other Information
The Notice of 20212023 Annual Meeting of Stockholders and Proxy Statement, along with Antero’s Annual Report on Form 10-K for the year ended December 31, 2020,2022, filed with the SEC on February 17, 2021,15, 2023, and Antero’s 20202022 Annual Report to Stockholders are available free of charge at www.anteroresources.com in the “SEC Filings” subsection under the “Investors” section. These materials do not constitute a part of the proxy solicitation material.
Stockholders Sharing an Address
Each registered stockholder (meaning you own shares in your own name on the books of our transfer agent, American Stock Transfer and Trust Company LLC) will receive one Notice of Internet Availability (the “Notice”) per account, regardless of whether you have the same address as another registered stockholder.
If your shares are held in “street name” (that is, in the name of a bank, broker or other holder of record), applicable rules permit brokerage firms and Antero, under certain circumstances, to send one Notice to multiple stockholders who share the same address. This practice is known as “householding.” Householding saves printing and postage costs by reducing duplicate mailings. If you hold your shares through a broker, you may have consented to reducing the number of copies of materials delivered to your address. If you wish to revoke a previously granted “householding” consent, you must contact your broker. If your household is receiving multiple copies of the Notice and you wish to request delivery of a single copy, you should contact your broker directly.
Stockholder Proposals and Director Nominations for the
20222024 Annual Meeting
Stockholder Proposals for Inclusion in the 2024 Proxy Statement. Any stockholder desiring to present a proposal at Antero’s 20222024 Annual Meeting of Stockholders and to have the proposal included in Antero’s related proxy statement pursuant to Rule 14a-8 must send the proposal to Antero, c/o Yvette K. Schultz, at 1615 Wynkoop Street, Denver, Colorado, 80202, so that it is received no later than December 28, 2021.29, 2023. All such proposals should be in compliance with SEC rules and regulations. Antero will only include in its proxy materials those stockholder proposals that it receives before the deadline and that are proper for stockholder action.
Stockholder Proposals and Director Nominations for Presentation at the 2024 Annual Meeting But Not for Inclusion in 2024 Proxy Statement.In addition, any stockholder entitled to vote at Antero’s 20222024 Annual Meeting of Stockholders may propose business (other than proposals to be included in Antero’s proxy materials) and director nominees to be included on the agenda of, and properly presented for action at, the 20222024 Annual Meeting of Stockholders if written notice of such stockholder’s intent is given in accordance with the requirements of Antero’s bylaws and SEC rules and regulations. Any such proposal must be submitteddelivered in writing at the address shown abovepreviously in this section so it is received between February 17, 2022,6, 2024 and March 19, 2022.8, 2024; provided, however, that in the event that the date of Antero’s 2024 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after the first anniversary date of this year’s Annual Meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to the date of Antero’s 2024 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to Antero’s 2024 Annual Meeting of Stockholders or, if the first public announcement of the date of Antero’s 2024 Annual Meeting of Stockholders is
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Stockholder Proxy Solicitation for Shareholder Director Nominees. Any stockholder who intends to solicit proxies in support of any director nominees must comply with the content requirements of SEC Rule 14a-19 (the SEC’s universal proxy rule) at the time it complies with the earlier deadlines in the Company’s advance notice provisions of its bylaws. Thus, if a stockholder intends to solicit proxies in support of any director nominees submitted under the advance notice provisions of the Company’s bylaws for Antero’s 2024 Annual Meeting of Stockholders, then such stockholder must also provide proper written notice that sets forth all the information required by SEC Rule 14a-19 to the address shown previously in this section so that it is received between February 6, 2024 and March 8, 2024; provided, however, that if Antero’s 2024 Annual Meeting of Stockholder is called for a date that is more than 30 days before or more than 60 days after the first anniversary date of this year’s Annual Meeting, to be properly brought, timely notice by the stockholder must be so delivered not earlier than the close of business on the 120th day prior to the date of Antero’s 2024 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to Antero’s 2024 Annual Meeting of Stockholders or, if the first public announcement of the date of Antero’s 2024 Annual Meeting of Stockholders is less than 100 days prior to the date of Antero’s 2024 Annual Meeting of Stockholders, the 10th day following the day on which public announcement of the date of Antero’s 2024 Annual Meeting of Stockholders is first made by the Company. Further, in the event that Antero’s 2024 Annual Meeting of Stockholders is called for a date that is more than more than 30 days but less than 60 days after the first anniversary date of this year’s annual meeting date, to be properly brought, the notice by the stockholder must be received no later than the close of business on the later of the 60th day prior to the date of Antero’s 2024 Annual Meeting of Stockholders or the 10th day following the day on which public announcement of the date of Antero’s 2024 Annual Meeting of Stockholders is first made by the Company.
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Additions to the Charter pursuant to the Exculpation Amendment contemplated by Proposal No. 4 are indicated below by bold, underlined text. The full text of the Company’s currently applicable Amended and Restated Certificate of Incorporation was filed as an exhibit to the Company Annual Report on Form 10-K with the SEC on February 15, 2023.
The proposed Exculpation Amendment changes to the first and second paragraphs of Article NINTH are set forth below:
NINTH: No director or officerof the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, as applicable, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as it now exists. In addition to the circumstances in which a director or officerof the Corporation is not personally liable as set forth in the preceding sentence, a director or officerof the Corporation shall not be liable to the fullest extent permitted by any amendment to the DGCL hereafter enacted that further limits the liability of a director or officer, as applicable.
Any amendment, repeal or modification of this Article Ninth shall be prospective only and shall not affect any limitation on liability of a director or officerfor acts or omissions occurring prior to the date of such amendment, repeal or modification.
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