Item 5.02
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Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
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(b) Resignation of Officer
. Concho Resources Inc. (the
Company
)
held its 2017 Annual Meeting of Stockholders
(the
Annual Meeting
) on May 17, 2017. Following the Annual Meeting, the Board of Directors (the
Board
) of the Company held a special meeting.
At the Boards May 17, 2017 meeting, E. Joseph Wright notified the Board of his intention to retire from his position as Executive
Vice President and Chief Operating Officer of the Company in January 2019. The Company has planned for the transition of Mr. Wrights duties and responsibilities and has announced that C. William Giraud will succeed Mr. Wright as
Chief Operating Officer upon Mr. Wrights retirement.
(c) Appointment of Officer
. Also at the May 17, 2017 meeting, the Board
promoted Jack F. Harper to the role of President of the Company. Mr. Harper will also continue to serve as the Companys Chief Financial Officer.
Mr. Harper has no familial relationships with any director or other executive officer of the Company. There are no arrangements or
understandings between Mr. Harper and any other persons pursuant to which Mr. Harper was appointed as President and Chief Financial Officer. For additional information about Mr. Harper, including biographical information and information regarding
related party transactions, please refer to the Companys Proxy Statement filed with the Securities and Exchange Commission on April 5, 2017 (File No. 001-33615), which information is incorporated herein by reference.
(d) Election of Director
. At the Boards May 17, 2017 meeting, the Board increased the size of the Board from nine directors to ten
directors. The Board also appointed Mr. Wright as a director to fill the vacancy resulting from the expansion of the Companys Board from nine directors to ten directors. Mr. Wright will serve as a Class II director and his term
on the Board will expire at the Companys annual meeting of stockholders in 2018 or until his earlier resignation or removal.
There
are no understandings or arrangements between Mr. Wright and any other person pursuant to which Mr. Wright was elected to serve as a director of the Company. There are no relationships between Mr. Wright and the Company or any of its
subsidiaries that would require disclosure pursuant to Item 404(a) of Regulation
S-K.
As an employee director, Mr. Wright will receive compensation in accordance with the Companys policies for
compensating employee directors.
(e) Retirement Agreement
. In connection with Mr. Wrights anticipated retirement as described above,
the Company entered into a Retirement Agreement (the
Retirement Agreement
) with Mr. Wright on May 17, 2017, which agreement was approved by the Compensation Committee of the Board. The Retirement Agreement
effectively amends Mr. Wrights existing Employment Agreement with the Company dated December 19, 2008 that was filed on such date as Exhibit 10.3 to the Companys Current Report on Form
8-K,
as amended by First Amendment to Employment Agreement, the form of which was filed as Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q
filed on
May 6, 2011 (such Employment Agreement, as amended, the
Employment Agreement
).
Pursuant to the Retirement
Agreement, any automatic extension of the term of the Employment Agreement that would otherwise occur on January 1, 2019 will be for a period beginning on such date and ending on January 5, 2019, which is the expected date of
Mr. Wrights retirement, subject to the potential deferment of Mr. Wrights retirement date for up to six months under certain circumstances (January 5, 2019 or the deferred retirement date, as applicable, the
Retirement Date
).
The Retirement Agreement provides that Mr. Wright will be eligible to receive an annual
bonus for 2018 in the amount of $600,000 (the
2018 Bonus
), and such bonus will be paid on or before January 5, 2019 provided that Mr. Wright remains continuously employed by the Company until such date. In the
event that certain change of control transactions, as outlined in the Retirement Agreement, occur prior to Mr. Wrights retirement date, Mr. Wright may be eligible for a special bonus (the
Special
Bonus
)
in the form of a lump sum cash payment in the amount of (x) two times Mr. Wrights annualized base salary as in effect immediately prior to the Retirement Date, (y) the annual cash performance bonus, if
any, paid to him with respect to the 2017 calendar year, and (z) $600,000.
The Retirement Agreement also provides that certain long-term
incentive awards under the Companys 2015 Stock Incentive Plan will be made to Mr. Wright during the first four days of January, 2018 provided that he is employed by the Company on the date of grant. Specifically, Mr. Wright would
receive a restricted stock award (the
2018 RSA
) with a value on the date of grant equal to $1,700,000, a
one-year
of service vesting requirement, and otherwise the same terms and
conditions as the restricted stock awards made to similarly situated executives on or about the date of grant. Mr. Wright would also receive an award of performance units (the
2018 PSU
) with the same grant date value
as the 2018 RSA and the same terms and conditions as performance unit awards made to similarly situated executives on or about the date of grant, except that Mr. Wright would not forfeit the 2018 PSU if he retires on the Retirement Date as
described below. The 2018 RSA and the 2018 PSU will be the only long-term incentive awards Mr. Wright receives after May 17, 2017 for his service as an officer of the Company.
Upon Mr. Wrights retirement on the Retirement Date, the Retirement Agreement provides
that the Company will provide him with the following benefits (the
Retirement Benefits
): (i) his unvested shares of restricted stock granted to him by the Company will fully vest on the Retirement Date; (ii) his
unvested performance units will not be forfeited and will become payable based on the satisfaction of certain conditions and (iii) he will be reimbursed by the Company for (or the Company may directly pay) the premiums associated with the
continuation coverage he may elect for up to 18 months following his retirement under the Companys group health plans.
A copy of
the Retirement Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The above description of the Retirement Agreement is a summary and is qualified in its entirety by reference to the complete text of the Retirement
Agreement.
Item 5.07
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Submission of Matters to a Vote of Security Holders.
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At the Annual Meeting, the
Companys stockholders were requested to (i) elect three Class I directors to serve on the Companys Board of Directors for a term of office expiring at the Companys 2020 Annual Meeting of Stockholders, (ii) ratify the
Audit Committee of the Board of Directors selection of Grant Thornton LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2017, (iii) approve, on an advisory basis, the
compensation of the Companys named executive officers and (iv) approve, on an advisory basis, the frequency of the stockholder vote on the compensation of the Companys named executive officers. Each of these items is more fully
described in the Companys definitive proxy statement, which was filed with the Securities and Exchange Commission on April 5, 2017.
At the close of business on March 20, 2017, the record date for the Annual Meeting, there were 148,170,944 shares of the Companys
common stock issued, outstanding and entitled to vote at the Annual Meeting. The results of the matters voted upon at the Annual Meeting are as follows:
Proposal No.
1 Election of Class
I Directors
: The election of each Class I director was approved as
follows:
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Nominee
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For
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Against
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Abstain
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Broker Non-Votes
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Timothy A. Leach
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125,738,829
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1,027,980
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405,760
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3,465,982
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William H. Easter III
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125,988,416
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1,029,651
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154,502
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3,465,982
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John P. Surma
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126,593,286
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424,846
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154,437
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3,465,982
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Proposal No.
2 Ratification of the Selection of Grant Thornton LLP
: The ratification of the
selection of Grant Thornton LLP was approved as follows:
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For
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Against
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Abstain
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130,017,068
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464,661
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156,822
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Proposal No.
3 Approval, on an Advisory Basis, of the Compensation of the Companys Named
Executive Officers
: The compensation of the Companys named executive officers was approved on an advisory basis as follows:
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For
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Against
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Abstain
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Broker Non-Votes
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125,450,986
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1,318,519
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403,064
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3,465,982
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Proposal No.
4 Approval, on an Advisory Basis, of the Frequency of the Stockholder
Vote on the Compensation of the Companys Named Executive Officers
: The holding of the advisory vote on the compensation of the Companys named executed officers every year was approved on an advisory basis as follows:
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One Year
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Two Years
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Three Years
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Abstain
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Broker Non-Votes
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116,038,147
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18,285
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10,834,735
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281,402
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3,465,982
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The Company has determined that it will hold an advisory vote on the compensation of its named executive
officers every year, until the next stockholder advisory vote on the frequency of the advisory vote on the compensation of the Companys named executive officers.