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 required
Fee paid previously with preliminary materials
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
 

 

JUNE 6, 2023

8:30 A.M. Mountain Time

 

Antero Principal Executive Offices

1615 Wynkoop Street
Denver, CO 80202

NOTICE

of 2023 Annual Meeting
of Shareholders

 

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 three Class I members of Antero Resources Corporation’s Board of Directors (the “Board”) named in this Proxy Statement to serve until Antero’s 2026 Annual Meeting of Stockholders,
2. Ratify the appointment of KPMG LLP as Antero’s independent registered public accounting firm for the year ending December 31, 2023,
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

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 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 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 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, 2022 (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
listed on the
Notice of Internet
Availability
(the “Notice”)

 

 

BY
TELEPHONE

Use the toll-free
number listed on
the Notice

 

 

BY MAIL

Sign, date and
return your
proxy card in
the provided
pre-addressed
envelope

 

 

DURING THE
ANNUAL MEETING

Vote online during the
Annual Meeting.
See page 10 of the
Proxy Statement for
instructions on
how to attend online

 

Table of Contents

 

PROXY STATEMENT   4
     
PROXY SUMMARY   4
Corporate Responsibility   4
Investor Outreach   8
Executive Compensation Highlights   8
Current Directors and Board Nominees   9
2023 Annual Meeting of Stockholders   9
Cautionary Note Regarding Forward-Looking Statements   11
     
ITEM ONE:   ELECTION OF DIRECTORS   13
     
DIRECTORS   15
Class I Directors   15
Class II Directors   17
Class III Directors   18
     
EXECUTIVE OFFICERS   20
     
CORPORATE GOVERNANCE   21
Corporate Governance Guidelines   21
Director Independence   21
Board Leadership Structure   21
Election of Lead Director   22
How Director Nominees are Selected   23
Board’s Role in Risk Oversight   24
Board and Committee Self-Evaluations   24
Majority Vote Director Resignation Policy   25
Meetings   25
How to Contact the Board   25
Available Governance Materials   26
     
BOARD COMMITTEES   27
General   27
Audit Committee   27
Compensation Committee   27
Nominating & Governance Committee   28
Conflicts Committee   28
Environment, Social and Governance (ESG) Committee   28
     
COMPENSATION OF DIRECTORS   29
General   29
Annual Cash Retainers   29
Equity-Based Compensation   30
Fees   30
Stock Ownership Guidelines   30
2022 Non-Employee Director Compensation   30
     
ITEM TWO:    RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   31
     
AUDIT MATTERS   32
Audit Committee Report   32
Audit and Other Fees   33

 

  -  2023 Proxy Statement 2
 
Back to Contents
ITEM THREE:   ADVISORY VOTE ON EXECUTIVE COMPENSATION   34
     
COMPENSATION DISCUSSION AND ANALYSIS   35
2022 Named Executive Officers   35
2022 Say-on-Pay and Say-on-Frequency Advisory Votes   35
Compensation Philosophy and Objectives of Our Compensation Program   36
Compensation Best Practices   36
Implementing Our Compensation Program Objectives   37
Elements of Direct Compensation   40
Other Benefits   48
2023 Compensation Decisions   49
Other Matters   49
Compensation Committee Report   53
     
EXECUTIVE COMPENSATION TABLES   54
Summary Compensation Table   54
Grants of Plan-Based Awards for Fiscal Year 2022   55
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table   57
Outstanding Equity Awards at 2022 Fiscal Year-End   58
Option Exercises and Stock Vested in Fiscal Year 2022   63
Pension Benefits   63
Nonqualified Deferred Compensation   63
Potential Payments Upon Termination or Change in Control   64
Equity Compensation Plan Information   74
Chief Executive Officer Pay Ratio   74
     
ITEM FOUR:   AMENDMENT TO ANTERO’S CHARTER TO REFLECT OFFICER EXCULPATION   78
     
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT   80
Beneficial Ownership   80
     
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE   81
     
DELINQUENT SECTION 16(A) REPORTS   81
     
RELATED PERSON TRANSACTIONS   82
General   82
Agreements with Antero Midstream Corporation   82
Employment   87
     
QUORUM AND VOTING   87
Voting Stock   87
Quorum   87
Stockholder List   88
Vote Required   88
Default Voting   89
Revoking Your Proxy   89
Solicitation Expenses   89
Copies of the Annual Report   89
     
ADDITIONAL INFORMATION   90
Proxy Materials, Annual Report and Other Information   90
Stockholders Sharing an Address   90
Stockholder Proposals and Director Nominations for the 2024 Annual Meeting   90
     
APPENDIX A:   AMENDMENT TO AMENDED AND RESTATED CERTIFICATE OF INCORPORATION   92

 

  -  2023 Proxy Statement 3
 
Back to Contents

PROXY STATEMENT

 

PROXY SUMMARY

 

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.

 

Corporate Responsibility

 

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.

 

Human Capital Management

 

The largest contribution in making Antero a responsible and sustainable company comes from our talented and experienced employees. We encourage our employees to embrace our values, and work every day to make these values apparent in all that we do.

 

The safety and security of our people and the integrity of our operations are our top priorities. Our health and safety compliance program seeks to protect our workforce and the communities in which we operate by setting a goal of zero incidents, zero harm, zero compromise. We have well developed and thoughtful processes for identifying and mitigating safety risks:
   
  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, pre-job safety startup reviews, and a library of over 30 individual training courses
     
Our success as a company is not only measured by our financial results but also by how we treat our employees. We strive to help our people enjoy healthier lives, achieve educational goals, and pursue economic opportunities for themselves and their families by offering competitive compensation and benefits, including:
   
  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 and long-term disability coverage
     
  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.

 

  -  2023 Proxy Statement 4
 
Back to Contents
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 by suppliers, contractors, independent consultants and other parties that Antero works with through a set of guidelines focusing on equal opportunity, workplace safety, protection of the environment, compensation and protection of proprietary information and requires the protection of human rights and respect for freedom of association
     
  Human, Labor and Indigenous Rights Policy –promotes respect of human rights through compliance with applicable national and local laws as well as pertinent trends and norms with respect to compensation, discrimination, health and safety, community and indigenous peoples; prohibits child labor, forced labor and human trafficking; recognizes freedom of association; prohibits workplace harassment, discrimination, and misuse of employer power, in line with applicable laws related to all of these topics; and provides access to a hotline for reporting concerns or grievances

 

Community Engagement

 

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    
 
 
   
 
     

 

Diversity

 

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

 

  -  2023 Proxy Statement 5
 
Back to Contents

align 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
 
   
   

 

Governance

 

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:

 

Director independence and Board composition
   
  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 directors range from 47 to 78 years old, and the average director tenure is 7.9 years
     
Focus on Environmental and Social Matters
   
  We have an ESG Committee of the Board that guides and governs our ESG initiatives
     
  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 and our Supplier Code of Conduct
     
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

 

  -  2023 Proxy Statement 6
 
Back to Contents
Environment and Safety(1)

 

We 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

 

   
         

Reduced our Scope 1 GHG emissions by approximately 10% from our 2021 performance

 

87% total produced water reused or recycled

 

Our methane intensity rate of 0.014% and methane leak loss rate of 0.016% are industry leading

Our employees completed 7,268 health and safety training hours

 

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 Antero Midstream’s and Antero Resources’ 2021 ESG Reports or calculated from the 2021 ESG Reports and public disclosures. Antero Resources’ and Antero Midstream’s emission intensity is based on the total GHG emissions reported to the EPA under Subpart W of the Greenhouse Gas Reporting Rule Program. Antero Resources’ and Antero Midstream’s methane leak loss rate performance is derived from average data derived from OneFuture. GHG intensity includes companies’ midstream and/or downstream operations.

 

  -  2023 Proxy Statement 7
 
Back to Contents

Investor Outreach

 

Antero and the Board value input from stockholders, and we are committed to maintaining an open dialogue to receive feedback on important items. In 2022, we met with stockholders to discuss, among other things, environmental and social matters.

 

Executive Compensation Highlights

 

Key 2022 Company performance highlights:
   
  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.

 

Below is a summary of key components of our executive compensation program for, and performance levels achieved in 2022:

 

Long-term incentive compensation awards are 50% performance-based for our Named Executive Officers based on rigorous absolute TSR performance hurdles and leverage metrics. All long-term incentive awards vest over several years to reward sustained Company performance over time.
   
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, goals and results are shown on page 43 of the proxy.
   
Performance awards with a performance period ending in 2022 paid out at 200% of target.
   
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.

 

Below 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 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:

 

  the Company’s stock price performance and strong operational performance in 2021 and 2022;
     
  successful management of two separate publicly traded companies; and
     
  an increasingly competitive talent market.
     
Exceptional performance should be appropriately rewarded. In 2022, the Compensation Committee generally targeted the 75th percentile of compensation for similarly situated executives in the 2022 peer group for our Named Executive Officers.

 

  -  2023 Proxy Statement 8
 
Back to Contents
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.
   

Current Directors and Board Nominees

 

    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                

 

  Chairperson

 

Board Composition Highlights

 

 

2023 Annual Meeting of Stockholders

 

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 makes it easier for stockholders to attend and participate. Moreover, this format empowers stockholders around the world to participate at no cost.

 

Here are several ways our virtual format will enhance stockholder access and participation and protect stockholder rights:

 

We Encourage Questions. Stockholders can submit questions for the meeting online in advance or live during the meeting, following the instructions below. During the meeting, we will answer as many appropriate stockholder-submitted questions as time permits. Following the Annual Meeting, we will publish an answer to each appropriate question we received on our Investor Relations website at www.anteroresources.com/investors as soon as practical.

 

  -  2023 Proxy Statement 9
 
Back to Contents
We Believe in Transparency. Although the live webcast is available only to stockholders at the time of the meeting, we will post a webcast replay, the final report of the inspector of election, and answers to all appropriate questions asked by stockholders in connection with the Annual Meeting to our Investor Relations website at www.anteroresources.com/investors.
   
We Proactively Take Steps to Facilitate Your Participation. During the Annual Meeting, we will offer live technical support for all stockholders attending the meeting.

 

Meeting Admission

 

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 17, 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 read the instructions below so you understand how to gain admission. If you do not comply with these procedures, you will not be able to participate in the Annual Meeting.

 

Stockholders may participate in the Annual Meeting by visiting www.virtualshareholdermeeting.com/ AR2023. If you are a stockholder of record, you will need the control number on your Notice of Internet Availability (the “Notice”) or proxy card to log 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 you receive from your broker, bank, or other nominee.

 

Stockholders of record hold shares directly with American Stock Transfer and Trust Company LLC. “Beneficial” or “street name” stockholders hold shares through a broker, bank, or other nominee.

 

Please allow ample time to check in to the virtual meeting. The site will be 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 at (844) 986-0822 (if you are in the U.S.); or (303) 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/AR2023, which will be open 15 minutes before the Annual 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, 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.

 

Voting Before or During the Meeting

 

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. 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:

 

Online. Submit a proxy electronically using the website listed on the Notice. You will need the control number from your Notice to log on to the website. Internet voting facilities will be available until 11:59 p.m., Eastern Time, on Monday, June 5, 2023.
   
By Telephone. Request the proxy materials and submit a proxy by telephone using the toll-free number listed on the Notice. You will need the control number from your Notice when you call. Telephone voting facilities will be available until 11:59 p.m., Eastern Time, on Monday, June 5, 2023.
   
By Mail. You may request a hard copy proxy card by following the instructions on the Notice. You can submit your proxy by signing, dating and returning your proxy card in the provided pre-addressed envelope.

 

  -  2023 Proxy Statement 10
 
Back to Contents
In Person Online. If you are a registered stockholder and you attend the Annual Meeting online, you can vote via the Internet during the meeting. Follow the instructions at www.virtualshareholdermeeting.com/AR2023 to vote during the meeting.

 

If you are a beneficial stockholder, 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, 300,135,248 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.

 

Cautionary Note Regarding Forward-Looking Statements

 

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

 

  -  2023 Proxy Statement 11
 
Back to Contents

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.

 

 

  -  2023 Proxy Statement 12
 
Back to Contents

ITEM ONE: ELECTION OF DIRECTORS

 

The Board is divided into three classes. Directors in each class are elected to serve for three-year terms and until they are re-elected, their successors are elected and qualified, or they resign or are removed. Each year, the directors of one class stand for re-election as their terms of office expire.

 

Based on recommendations from our Nominating & Governance Committee, the Board has nominated the following individuals for election as Class I directors of Antero, with terms to expire at the 2026 Annual Meeting of Stockholders, barring an earlier resignation or removal:

 

   
         
Paul M. Rady   Brenda R. Schroer   Thomas B. Tyree, Jr.

 

All nominees currently serve as Class I 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.

 

  -  2023 Proxy Statement 13

 
Back to Contents

Summary of Director Qualifications and Experience

 

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

 
Back to Contents

DIRECTORS

 

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 I directors is up for reelection at the Annual Meeting.

 

Class I Directors

 

 

Age: 69

Director Since:

2004 Committee

Memberships:

None

 

    

Paul M. Rady

Chairman, Chief Executive Officer and President

 

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 of Antero Resources since May 2004

 

President of Antero Midstream since April 30, 2021 and Chief Executive Officer and Chairman of the Board of Directors of Antero Midstream since the closing of Antero 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.

 

Other Public Company Boards:

 

Antero Midstream; Antero Midstream Partners LP (until March 2019)

 

  -  2023 Proxy Statement 15

 
Back to Contents

 

Age: 47
Director Since:
2021
Committee
Memberships:

Audit Committee (chair), Environmental, Social and Governance (ESG) Committee

    

Brenda R. Schroer

 

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 Treasurer of Concho Resources from January 2019 until it was acquired by ConocoPhillips in January 2021. Previously served as Senior Vice President, Chief Accounting Officer and Treasurer of Concho from May 2017 to January 2019 as well as other roles (including Vice President, Chief Accounting Officer and Treasurer) starting in 2013.

 

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

 

     

 

Age: 62
Director Since: 2019

Committee
Memberships:

Audit Committee, Conflicts Committee, Environmental, Social and Governance (ESG) Committee

    

Thomas B. Tyree, Jr.

 

Key Skills, Attributes and Qualifications:

 

Chairman of Northwoods Energy LLC, a private upstream oil and gas company that he co-founded in 2018

 

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.

 

Other Public Company Boards:

 

Extraction Oil & Gas, Inc. (until November 2021); Bonanza Creek Energy, Inc. (until March 2020)

 

  -  2023 Proxy Statement 16

 
Back to Contents

Class II Directors

 

 

Age: 72
Director Since:
2004 Committee
Memberships:

Compensation
Committee,
Nominating &
Governance
Committee

    

W. Howard Keenan, Jr.

 

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)

     

 

Age: 61
Director Since:
2020
Committee
Memberships:

Audit
Committee,
Nominating &
Governance
Committee,
Conflicts
Committee,
Environmental,
Social and
Governance
(ESG)
Committee

    

Jacqueline C. Mutschler

 

Key Skills, Attributes and Qualifications:

 

Executive Consultant for the energy and technology sectors since 2014

 

Member of Weir Group plc Technology Advisory Board from 2015 to 2017

 

From 2006 until retirement in 2014, served as Senior Vice President of Upstream Technology at BP, PLC

 

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.

 

Other Public Company Boards:

 

Weatherford International plc

 

 

  -  2023 Proxy Statement 17

 
Back to Contents

Class III Directors

 

 

Age: 78
Director Since:
2013
Committee
Memberships:

Compensation
Committee
(chair),
Nominating &
Governance
Committee,
Conflicts
Committee
(chair)

    

Robert J. Clark

 

Key Skills, Attributes and Qualifications:

 

Founder and former Chairman of 3 Bear Energy, LLC, a midstream energy company with operations in the Delaware Basin in southwest New Mexico, from 2013 until its sale to a subsidiary of Delek Logistics Partners, LP in 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 the Boys and Girls Club of Metro Denver, and a member of the Board of Directors of Judi’s House, a Denver charity providing counseling for grieving children and 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

 

  -  2023 Proxy Statement 18

 
Back to Contents

 

Age: 73
Director Since:
2013
Committee
Memberships:

Nominating & Governance Committee (chair), Compensation Committee, Environmental, Social and Governance (ESG) Committee

    

Benjamin A Hardesty (Lead Director)

 

Key Skills, Attributes and Qualifications:

 

Owner of Alta Energy LLC, a consulting business focused on oil, natural gas and energy infrastructure in the Appalachian Basin and onshore United States, since May 2010

 

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
Director Since:
2019
Committee
Memberships:

Environmental,
Social and
Governance
(ESG)
Committee
(chair), Audit
Committee

    

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.

 

Other Public Company Boards:

 

Delek US Holdings, Inc.; Plains All American Pipeline, L.P. (until 2015); Plains GP Holdings, L.P. (until 2015)

 

 

  -  2023 Proxy Statement 19

 
Back to Contents

EXECUTIVE OFFICERS

 

The table below sets forth the name, age and principal position of each of our executive officers as of December 31, 2022.

 

Name   Age   Principal Position
Paul M. Rady   69   Chairman of the Board, Chief Executive Officer and President
Michael N. Kennedy   48   Chief Financial Officer and Senior Vice President—Finance
Yvette K. Schultz   41   Chief Compliance Officer, Senior Vice President—Legal, General Counsel and Corporate Secretary

 

Biographical information for Mr. Rady 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.

 

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 since 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 Senior Vice President of Finance since the closing of the Simplification Transactions in March 2019. 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 Senior Vice President of Finance of the general partner of Antero Midstream GP LP beginning in April 2017 and as Chief Financial Officer and Senior Vice President of Finance of the general partner of Antero Midstream Partners LP beginning in 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.

 

Yvette K. Schultz has served as Antero’s Chief Compliance Officer and Senior Vice President of Legal since January 2022, and as Antero’s General Counsel since January 2017. Ms. Schultz has also served as Antero’s Corporate Secretary since April 2021. Ms. Schultz was previously Antero’s Director of Legal from 2015 to 2017. Prior to joining Antero, Ms. Schultz was an attorney at Vinson & Elkins L.L.P. from 2008 to 2012 and at Latham & Watkins LLP from 2012 to 2015. Ms. Schultz holds a B.S. in Computer Science and Masters degree in Business Administration from the University of South Dakota. She also holds a J.D. and B.C.L. from the Paul M. Hebert Law Center at Louisiana State University.

 

  -  2023 Proxy Statement 20
 
Back to Contents

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. The 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 of the independent directors;
interaction between the Board and outside parties;
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, charters, and independence;
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 or amendments 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 made to organizations where directors serve as board members or executive officers, the Board has affirmatively determined that none of the directors have material relationships with Antero and all of them are independent as defined by NYSE listing standards except Mr. Rady, Antero’s Chief Executive Officer and President.

 

 

7 of 8

Directors are Independent

 

 
 

 

Board Leadership Structure

 

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 understanding 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 its leadership structure to meet those needs at any given time.

 

  -  2023 Proxy Statement 21
 
Back to Contents

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 has 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. Because seven of the eight 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. The Lead 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 has served in this role since 2019, chairing executive sessions of the non-management directors and establishing 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
 
Back to Contents

How Director Nominees Are Selected

 

Renominating incumbent directors

 

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.

 

The Nominating & Governance Committee is responsible for assessing the appropriate balance of skills and characteristics required of Board members.

 

Appointing New Directors and Filling Vacancies

 

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.

 

For information regarding the experiences, qualifications, attributes, and skills of the current members of our Board, please see “Proxy Summary—Summary of Director Qualifications and 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
 
Back to Contents

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.

 

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, 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
 
Back to Contents

Majority Vote Director Resignation Policy

 

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 more votes cast “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.

 

Meetings

 

The Board held 8 meetings in 2022. The outside directors held 4 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 time he or she served.

 

Directors are encouraged to attend the Annual Meetings of Stockholders. All of the members of the Board attended the 2022 Annual Meeting.

 

How to Contact the Board

 

General Communications

 

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 Compliance Officer and Corporate Secretary will review and forward each communication, as soon as reasonably practicable, to the addressee(s) 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, the Chief Compliance Officer and Corporate Secretary also may forward the communication to the applicable officer or committee chair.

 

Legal or Compliance Concerns

 

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
 
Back to Contents
Insider Trading Policy

 

Antero’s Insider Trading Policy, which applies to all 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. 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.

 

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;
Charters of the Audit Committee, the Compensation Committee, the Nominating & Governance Committee, and the Environmental, Social and Governance Committee;
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
Political Advocacy Policy.

 

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 our website.

 

  -  2023 Proxy Statement 26
 
Back to Contents

BOARD COMMITTEES

 

General

 

The Board had five standing committees in 2022: the Audit Committee, the Compensation Committee, the Nominating & Governance Committee, the Conflicts Committee and the Environmental, Social and Governance (ESG) Committee. The charters of each 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 2022.

 

Audit Committee

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:

 

  the selection of Antero’s independent accountants,

  the scope of annual audits,

  fees to be paid to the independent accountants,

  the performance of Antero’s independent accountants, and

  Antero’s accounting practices.

 

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.

 

Compensation Committee

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.

 

  -  2023 Proxy Statement 27
 
Back to Contents

Nominating & Governance Committee

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.

 

* Brenda R. Schroer, Vicky Sutil and Thomas B. Tyree, Jr. stepped down from the Nominating & Governance Committee on May 20, 2022.

 

Conflicts Committee

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 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.

 

Environmental, Social and Governance (ESG) Committee

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 Environmental, Health and Safety Board Committee at Delek. Benjamin Hardesty is a 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.

 

During 2022, the ESG Committee reviewed, and Antero published, its 2021 ESG Report, which is available at https://www.anteroresources.com/community-sustainability.

 

* Brenda R. Schroer and Thomas B. Tyree, Jr. joined the Environmental, Social and Governance (ESG) Committee on May 20, 2022.

 

  -  2023 Proxy Statement 28
 
Back to Contents

COMPENSATION OF DIRECTORS

 

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 periodically and recommends changes, if appropriate, to the Board for approval.

 

Our employee directors do not receive additional compensation for their services as directors. All compensation received from Antero as employees is disclosed in the Summary Compensation Table on page 54.

 

Annual Cash Retainers

 

Effective April 15, 2022, some of the annual retainers payable to non-employee directors of the Board were increased slightly, as indicated below. These modifications were made to ensure that our director compensation 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  $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.

 

Effective April 15, 2023, the annual retainer for non-employee directors will be increased from $80,000 to $100,000 and the additional annual retainers for (i) Lead Director will be increased from $25,000 to $40,000 and (ii) Compensation Committee chair will be increased from $15,000 to $20,000. Otherwise, the cash compensation of our non-employee directors in 2023 will be the same as that described for 2022.

 

  -  2023 Proxy Statement 29
 
Back to Contents

Equity-Based Compensation

 

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 agreements pursuant to which such awards are granted. These awards are granted in arrears on a quarterly basis, so each installment has a grant date fair value of approximately $50,000. Effective April 15, 2023, the annual equity-based compensation for non-employee directors will be increased from an aggregate grant date value of $200,000 to $215,000.

 

Fees

 

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 or its committees, and to attend and participate in general education and orientation programs for directors.

 

Stock Ownership Guidelines

 

Under our stock ownership guidelines, within five years of being elected or appointed to the Board, a non-employee director is required to own shares of our common stock with a fair market value equal to at least five times the amount of the annual cash 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.”

 

2022 Non-Employee Director Compensation

 

The following table provides information concerning the compensation of our non-employee directors for the fiscal year ended December 31, 2022.

 

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 during fiscal 2022.
(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 2022, computed in accordance with the rules of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). See Note 9 to our consolidated financial statements on Form 10-K for the year ended December 31, 2022, for additional detail regarding assumptions underlying the value of these equity awards. Each of Messrs. Clark, Hardesty and Keenan held 3,003 exercisable stock options previously granted under the Antero Resources Corporation Long-Term Incentive Plan (the “Prior LTIP”) as of December 31, 2022.

 

  -  2023 Proxy Statement 30
 
Back to Contents

ITEM TWO:   RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee of the Board has selected KPMG LLP as Antero’s independent registered public accounting firm for the year ending December 31, 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, 2022, on February 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, 2023.

 

  -  2023 Proxy Statement 31
 
Back to Contents

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; (vii) approving or ratifying certain related party transactions as set forth in Antero’s Related Persons Transactions Policy; (viii) reviewing with management Antero’s major financial risk exposures; (ix) assisting the Board in monitoring compliance with legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters; (x) preparing the report of the Audit Committee for inclusion in Antero’s proxy statement; and (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, 2022, be included in the Form 10-K, which was filed with the SEC on February 15, 2023.

 

Members of the Audit Committee*:

 

Brenda R. Schroer (Chairman)
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.

 

  -  2023 Proxy Statement 32
 
Back to Contents

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
   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 filings with the SEC, including review and preparation of registration statements, comfort letters and consents.

 

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, 2022, the Audit Committee approved all of the services described above.

 

  -  2023 Proxy Statement 33
 
Back to Contents

ITEM THREE:   ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

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 2022 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 2022. The Compensation Committee and the Board believe that our compensation practices for 2022 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 2022. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers for 2022 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 2022 as disclosed in the proxy statement for the 2023 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.

 

  -  2023 Proxy Statement 34
 
Back to Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis provides details on the following matters:

 

Our 2022 say-on-pay advisory vote;
Our 2022 executive compensation program and the compensation awarded under that program;
Material actions taken with respect to our 2023 executive compensation program; and
Pertinent executive compensation policies.

 

2022 Named Executive Officers

 

The table below sets forth the name and principal position of each of our 2022 Named Executive Officers.

 

Name Principal Position
Paul M. Rady Chairman of the Board, Chief Executive Officer and President
Michael N. Kennedy Chief Financial Officer and 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 Votes

 

At the Company’s 2022 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 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” vote when evaluating the compensation of the Named Executive Officers in 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.

 

  -  2023 Proxy Statement 35
 
Back to Contents

Compensation Philosophy and Objectives of Our Compensation Program

 

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 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 10, 2023, our Named Executive Officers hold approximately 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 2022 promote a strong alignment between Named Executive Officer pay and Company 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 2022 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


 

  -  2023 Proxy Statement 36
 
Back to Contents

Implementing Our Compensation Program Objectives

 

Role of the Compensation Committee

 

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 all 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 Officer and the Company’s Chief Financial Officer within the framework of our executive compensation goals and objectives. The Compensation Committee also evaluates the performance 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 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.

 

Role of the Antero Midstream Compensation Committee and Allocation of Compensation Expenses

 

Our Named Executive Officers provide services to us and to Antero Midstream. In 2022, the Compensation Committee and the Antero Midstream Compensation Committee (the “AM Compensation Committee”) each separately discussed its Named Executive Officer’s aggregate total cash compensation and then approved an aggregate total 2022 base salary and 2022 target bonus for services our Named Executive Officers provide to both Antero and Antero Midstream. Cash compensation included base salary and annual cash incentives in 2022. We pay all elements of cash compensation to, and provide all benefits for, our Named Executive Officers. Antero Midstream reimburses us for a portion of base salaries paid to our Named Executive Officers based on the percentage of all non-compensation general and administrative expenses attributable to each company and calculated quarterly 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”). Antero Midstream reimbursed us for a portion of our Named Executive Officer’s base salary that equaled 27.5% for each of the four quarters in 2022 (the “2022 NEO AM Reimbursement Percentage”). The Compensation Committee and the AM Compensation Committee established its own performance metrics for its annual cash incentive program, and Antero Midstream reimbursed us for all amounts paid pursuant to Antero Midstream’s annual cash incentive program.

 

Antero Midstream 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 2022 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

 

  -  2023 Proxy Statement 37
 
Back to Contents

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 2022. For information regarding compensation paid to our Named Executive Officers for services provided to Antero Midstream in 2022, please see the Proxy Statement filed by Antero Midstream on April 27, 2023.

 

Role of Management

 

The Chief Executive Officer, together with our Chief Financial Officer, typically provide recommendations to the 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 Chief 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 considers these recommendations when reviewing the performance of, and setting compensation for, the other executive officers.

 

Role of External Advisors

 

The Compensation Committee has the authority to retain an independent executive compensation consultant. For 2022, the Compensation Committee retained NFPCC. In compliance with the SEC and NYSE disclosure requirements, the Compensation Committee reviewed the independence of NFPCC under six independence factors. After its review, the Compensation Committee determined that NFPCC was independent.

 

In 2022, NFPCC:

 

Collected and reviewed all relevant Company information, including our historical compensation data and our organizational structure;
With input from management, the Compensation Committee evaluated the peer group of companies to use for executive compensation comparisons and made recommendations regarding modifications;
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 programs; and
Completed other ad hoc assignments, such as helping with the design of incentive arrangements.

 

NFPCC’s reports were provided to the Compensation Committee and also used by Messrs. Rady and Kennedy in making their recommendations to the Compensation Committee.

 

  -  2023 Proxy Statement 38
 
Back to Contents

Competitive Peer Analysis

 

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 Kennedy, the Compensation Committee used market compensation data provided by NFPCC 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 oil 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 2022 Oil and Gas E&P Industry Compensation Survey prepared by Effective Compensation, Incorporated.

 

Peer Group

 

NFPCC recommended, and after evaluation and discussion the Compensation Committee approved a peer group for use in determining compensation for 2022 of onshore publicly traded oil and gas companies that are reasonably similar to us in terms of size and operations. We believe these companies are properly aligned across financial metrics such as revenue, market capitalization, and enterprise value, complexity and geography of operations. We refer to the following ten companies as the “Peer Group”:

 

2022 APPROVED PEER GROUP

 

Company Ticker
APA Corp. APA
Coterra Energy Inc. CTRA
CNX Resources Corporation CNX
Continental Resources, Inc. CLR
Devon Energy Corporation DVN
Diamondback Energy Inc. FANG
EQT Corporation EQT
Ovintiv Inc. OVV
Range Resources Corporation RRC
Southwestern Energy Company SWN

 

  -  2023 Proxy Statement 39
 
Back to Contents
Positioning Versus Market

 

In determining compensation for 2022, the Compensation Committee determined that it was appropriate to target the 75th percentile of the Peer Group for base salaries, target annual cash incentive awards, and long-term equity-based incentive awards. This increase in target compensation from 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 Officer and Company performance. The Compensation Committee feels that this increase in targeted compensation was not only appropriate but important to retain, appropriately reward, and motivate our world-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 adjust 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 Analysis, targeted compensation levels are only one of many factors considered by the Compensation Committee when setting compensation levels for our Named Executive Officers.

 

Elements of Direct Compensation

 

Our Named Executive Officers’ compensation for 2022 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
Annual incentive awards   Cash   Operational strategy execution, Net Debt/EBITDAX, Cash Costs, and ESG   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 absolute total stockholder return

 

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   33% vests on each of the first three anniversaries of grant   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 2022, calculated based on amounts reported for 2022 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:

 

  -  2023 Proxy Statement 40
 
Back to Contents
 
   

 

Base Salaries

 

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 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 considers our overall business performance and implementation of Company objectives when determining annual 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 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, final base salary levels may differ from the 75th percentile of peers.

 

  -  2023 Proxy Statement 41
 
Back to Contents

The table below reflects the portion of the base salary allocated to the Company in 2022 for each Named Executive 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  2022 Allocated
Base Salary
  

Percentage

Change in
Aggregate
Base Salary
from 2021 to
2022(1)

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

 

Purpose and Operation

 

Annual cash incentive payments, which we also refer to as cash bonuses, are a key component of each Named Executive Officer’s annual compensation package. The Compensation Committee adopted bonus targets for each of the Named Executive Officers, expressed as a percentage of base salary. The Compensation Committee, based on analysis provided by its independent consultant, NFPCC, determined that a slight increase from 120% to 130% was appropriate for Mr. Rady to align his compensation with the 75th percentile of the 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 2022 were as follows:

 

Executive Officer  Target
Bonus (as a %
of base salary)
Paul M. Rady   130%
Michael N. Kennedy   100%
W. Patrick Ash   85%
Yvette K. Schultz   85%

 

  -  2023 Proxy Statement 42
 
Back to Contents

2022 Performance Metrics

 

The maximum payout opportunity under the annual 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 weighting 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 selected 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%

 

  -  2023 Proxy Statement 43
 
Back to Contents
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.

 

  -  2023 Proxy Statement 44
 
Back to Contents

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 we 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, 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 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 annual 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 believes that these factors should be considered in the results of the 2022 annual incentive plan through a discretionary adjustment.

 

The 2022 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.

 

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

 

Annual Long-Term Incentive Awards Granted in 2022

 

Each of the Named Executive Officers received a grant comprised 50% of restricted stock units and 50% of performance share units in April of 2022 pursuant to the AR LTIP. The restricted stock units, or “RSUs,” granted to the Named Executive Officers in 2022 vest ratably on the first three anniversaries of the date of 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 our Named Executive Officers in 2022 will vest based on absolute total stockholder return, or “TSR,” while the other half will vest based on our

 

  -  2023 Proxy Statement 45
 
Back to Contents

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 in April 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: April 15, 2022 to April 15, 2023; April 15, 2023 through April 15, 2024; April 15, 2024 to April 15, 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%   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   > 2.5x         0%         0%        
Target   2.0x   100%   33.33%
Maximum   1.5x   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.

 

  -  2023 Proxy Statement 46
 
Back to Contents

Special Long-Term Incentive Awards Granted in 2022

 

In October of 2022, after working with management and NFPCC to complete an evaluation of the value of the performance and equity compensation granted by the Company over the previous three years as compared to its peers, the Compensation 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 October 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 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 absolute October 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   10%      100%   25%
Maximum   20%   200%   50%

 

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 for the annual long-term incentive awards granted to our Named Executive Officers in 2022. These values were established by the Compensation Committee in an effort to align target equity compensation values with the 75th percentile of the 2022 Peer Group.

 

 

  -  2023 Proxy Statement 47
 
Back to Contents
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 2022 are described more fully under “Grants of Plan-Based Awards for Fiscal Year 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.

 

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 2022, the Company matched 100% of the first 4% 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.

 

  -  2023 Proxy Statement 48
 
Back to Contents

2023 Compensation Decisions

 

Base Salaries

 

In March 2023, after comparing base salary levels to those of similarly situated executives in the 2023 Peer Group, reviewing the Company’s performance during 2022, and discussing the recommendations of Messrs. Rady and Kennedy and NFPCC, the Compensation Committee approved the following increases to base salary for the Named Executive Officers who continue to serve as executive officers during 2023:

 

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 2022 Reimbursement Percentage. The actual percentage of base salary allocated to the Company for 2023 will not be determinable until the 2023 Reimbursement Percentage is calculated following the end of 2023.

 

Annual Cash Incentive Awards

 

In April 2023, the Compensation Committee approved an annual incentive plan for the 2023 fiscal year. The 2023 annual incentive plan mirrors the 2022 annual incentive plan. We believe this structure motivates our Named Executive Officers to accomplish specific objectives that are important to our success and sustainable growth.

 

Long-Term Incentive Awards

 

Consistent with 2022, the Compensation Committee granted 50% performance-based long-term equity awards and 50% time-based equity awards to our Named Executive Officers in 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,” our Named Executive Officers would be entitled to receive accelerated vesting of their performance share units, restricted stock units and cash retention awards (if applicable) that remain unvested upon their termination of employment with us under certain circumstances or upon the occurrence of certain corporate events.

 

  -  2023 Proxy Statement 49
 
Back to Contents

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, 2022, all of our Named Executive Officers and directors were in compliance with these guidelines or had time remaining 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.

 

 

 

 

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.

 

  -  2023 Proxy Statement 50
 
Back to Contents

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). 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 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.

 

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.

 

  -  2023 Proxy Statement 51
 
Back to Contents

Tally Sheets

 

The Compensation Committee uses 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. 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.

 

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 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.

 

  -  2023 Proxy Statement 52
 
Back to Contents

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

Benjamin A. Hardesty

W. Howard Keenan Jr.

 

* Includes all members of the Compensation Committee as of the time the Compensation Committee Report was approved for inclusion in this Proxy Statement.

 

  -  2023 Proxy Statement 53
 
Back to Contents

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, 2022, 2021, and 2020. 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. 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
($)(2)
  Non-Equity
Incentive Plan
Compensation
($)(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) For Messrs. Kennedy and Ash, $266,667 and $166,667, respectively, of the amounts reported in this column for 2022 represent the portion of the special cash retention awards granted to such Named Executive Officers during 2020 that vested and were paid out in 2022 and $220,588 and $164,773, respectively, represent the discretionary increases to their annual incentive plan payments as approved by the Compensation Committee. For the remainder of the Named Executive Officers, the amounts reported in this column for 2022 represent the discretionary increases to their annual incentive plan payments as approved by the Compensation Committee.
(2) The amounts in this column represent the grant date fair value of restricted stock units and performance share units granted to the Named Executive Officers in 2022 pursuant to the AR LTIP, each as computed in accordance with FASB ASC Topic 718. See Note 10 to our consolidated financial statements on Form 10-K for the year ended December 31, 2022, for additional detail regarding assumptions underlying the value of these equity awards. If the maximum level of performance for the annual Net Debt to EBITDAX PSUs granted in April 2022 was achieved, then the value of such award granted to Messrs. Rady, Kennedy, and Ash and Ms. Schultz would be $4,749,958, $1,624,997, $1,299,997, and $1,249,970, respectively. If the maximum level of performance for the Net Debt to EBITDAX PSUs granted in October 2022 was achieved, then the value of such award granted to Messrs. Rady, Kennedy, and Ash and Ms. Schultz would be $5,257,101, $1,798,490, $1,438,733, and $1,388,459, respectively.
(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 2022 for each participating Named Executive Officer. Additionally, for Mr. Kennedy, this amount includes $11,126 and $11,797, which is the Company’s allocated portion of the cost of financial services provided to Mr. Kennedy by Ayco Financial Planning and Consulting during 2021 and 2022, respectively.

 

  -  2023 Proxy Statement 54
 
Back to Contents

Grants of Plan-Based Awards for Fiscal Year 2022

 

The table below sets forth the awards granted to our Named Executive Officers during 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(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
 
Back to Contents
       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 units granted to each of Messrs. Rady, Kennedy and Ash and Ms. Schultz on April 15, 2022 and October 19, 2022.
(3) This column reflects the number of restricted stock units granted to each of Messrs. Rady, Kennedy and Ash and Ms. Schultz on April 15, 2022 and October 19, 2022.
(4) The amounts in this column represent the grant date fair value of restricted stock units and performance share units granted to the Named Executive Officers pursuant to the AR LTIP, as computed in accordance with FASB ASC Topic 718. See Note 10 to our consolidated financial statements on Form 10-K for the year ended December 31, 2022, for additional detail regarding assumptions underlying the value of these equity awards.
(5) One quarter of the absolute TSR PSUs granted on April 15, 2022 are earned (or not) based upon our TSR performance for each of four performance periods: (i) from April 15, 2022 to April 15, 2023, (ii) from April 15, 2023 to April 15, 2024, (iii) from April 15, 2024 to April 15, 2025, and (iv) from April 15, 2022 to April 15, 2025. One quarter of the absolute TSR PSUs granted on October 19, 2022 are earned (or not) based upon our TSR performance for each of four performance periods: (i) from January 1, 2023 to December 31, 2023, (ii) from January 1, 2024 to December 31, 2024, (iii) from January 1, 2025 to December 31, 2025, and (iv) from January 1, 2023 to December 31, 2025. In each case, the Named Executive Officers are each eligible to receive up to 200% of one quarter of the target amount of TSR PSUs awarded, as determined at the end of each applicable performance period (subject to continued service through the fourth and final performance period). There is no performance threshold applicable to the absolute TSR PSUs, but if TSR performance falls between zero and target performance (15% absolute TSR for the April 15, 2022 awards and 10% absolute TSR for the October 19, 2022 awards) or between target and maximum performance (20% absolute TSR), then the number of absolute TSR PSUs that will become vested and earned will be determined using linear interpolation between the relevant performance levels.
(6) One third of the Net Debt to EBITDAX PSUs granted on April 15, 2022 are earned (or not) based upon our Net Debt to EBITDAX multiple for each of three performance periods: (i) from January 1, 2022 to December 31, 2022, (ii) from January 1, 2023 to December 31, 2023, and (iii) from January 1, 2024 to December 31, 2024. One third of the Net Debt to EBITDAX PSUs granted on October 19, 2022 are earned (or not) based upon our Net Debt to EBITDAX multiple for each of three performance periods: (i) from January 1, 2023 to December 31, 2023, (ii) from January 1, 2024 to December 31, 2024, and (iii) from January 1, 2025 to December 31, 2025. In each case, the Named Executive Officers are each eligible to receive up to 200% of one third of the target amount of Net Debt to EBTIDAX PSUs awarded, as determined at the end of each applicable performance period. There is no performance threshold applicable to the Net Debt to EBITDAX PSUs, but if the Net Debt to EBITDAX multiple falls between 2.5x (or higher) and target performance (2.0x) or between target and maximum performance (1.5x), then the number of Net Debt to EBITDAX PSUs that will become vested and earned will be determined using linear interpolation between the relevant performance levels.
(7) The restricted stock units granted to the Named Executive Officers on April 15, 2022 are subject to ratable vesting on the first three anniversaries of April 15, 2022, in each case, subject to such Named Executive Officer’s continued employment through such date. The restricted stock units granted to the Named Executive Officers on October 19, 2022 are subject to ratable vesting on the first three anniversaries of October 15, 2022, in each case, subject to such Named Executive Officer’s continued employment through such date.

 

  -  2023 Proxy Statement 56
 
Back to Contents

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 2022 table.

 

Performance Share Units

 

The Compensation Committee granted annual performance share units to our Named Executive Officers in April 2022. Fifty percent of the performance share units 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 50% of the performance share units will be earned (or not) based upon our 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 measured over four performance periods spanning each of the three calendar years following grant, plus a cumulative period of three calendar years following grant; and 50% of the performance share units 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 until the last date of the final performance period applicable to 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.

 

Restricted Stock Units

 

The Compensation Committee granted restricted stock units to each of our Named Executive Officers in 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 three-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.

 

  -  2023 Proxy Statement 57
 
Back to Contents

Outstanding Equity Awards at 2022 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, 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)                     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 units and (ii) the performance share units for which performance has been achieved but which require continued service, in each case, held by the Named Executive Officers, computed based on the closing price of our common stock on December 30, 2022, which was $30.99 per share.
(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 30, 2022, which was $30.99 per share.

 

  -  2023 Proxy Statement 58
 
Back to Contents
(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 RSU   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 EBITDAX PSU   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 RSU   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 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   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

 

  -  2023 Proxy Statement 59
 
Back to Contents
(4) This row includes outstanding performance share units as set forth below. The amounts included in the below table reflect (A) target performance for all performance share units for which the applicable performance periods had not yet begun as of December 31, 2022 because no such performance share units have a threshold and (B) reflect one tier above actual performance as of December 31, 2022 for all performance share units for which the applicable performance periods had begun as of December 31, 2022 but were not yet completed as of such date. Performance share units for which the applicable performance period was completed as of December 31, 2022 but which require each Named Executive Officer’s continued employment through a later date are reported in the “Number of Units That Have Not Vested” column and described in Footnote 3 to this table. The actual number of shares earned pursuant to performance share units may vary substantially from the amounts set forth above based on actual performance through the end of the applicable performance period.
   
  Name   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 EBITDAX PSU   39,391   Target   One-year performance period ending December 31, 2023
      2022 (April) Absolute TSR PSU   16,830   Target   One-year performance period ending April 15, 2023
      2022 (April) Absolute TSR PSU   16,830   Target   One-year performance period ending April 15, 2024
      2022 (April) Absolute TSR PSU   16,829   Target   One-year performance period ending April 15, 2025
      2022 (April) Absolute TSR PSU   16,829   Target   Three-year performance period ending April 15, 2025
      2022 (April) Net Debt to EBITDAX PSU   22,439   Target   One-year performance period ending December 31, 2023
      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
 
Back to Contents
  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 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   5,758   Target   One-year performance period ending April 15, 2023
      2022 (April) Absolute TSR PSU   5,758   Target   One-year performance period ending April 15, 2024
      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
 
Back to Contents
  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
 
Back to Contents

Option Exercises and Stock Vested in Fiscal Year 2022

 

The following table provides information concerning equity awards that vested or were exercised by our Named Executive Officers during the 2022 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       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 2022 fiscal year.
(2) This column reflects the number of restricted stock units and performance share units held by each Named Executive Officer that vested during the 2022 fiscal year.
(3) The amounts reflected in this column represent the aggregate market value realized by each Named Executive Officer upon vesting of the restricted stock units and the performance share units, computed based on the closing price of our common stock on the applicable vesting date.

 

Pension Benefits

 

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
 
Back to Contents

Potential Payments Upon Termination or Change in Control

 

Prior LTIP and AR LTIP Awards

 

Cash Retention Awards, Restricted Stock Units and Stock Options

 

Any unvested cash retention awards, restricted stock units, or 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). Such awards will be forfeited for zero consideration in connection with all other termination scenarios.

 

Performance Share Units

 

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

 

  -  2023 Proxy Statement 64
 
Back to Contents
    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.

 

  -  2023 Proxy Statement 65
 
Back to Contents
  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
 
Back to Contents
    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.

 

Definitions

 

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
 
Back to Contents

  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 individual becoming a director that is approved by a vote of at least two-thirds of the incumbent members of the Board shall be considered an incumbent member of the Board for these purposes.

 

For purposes of the 2020, 2021 and 2022 performance share units 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.

 

  -  2023 Proxy Statement 68
 
Back to Contents

Quantification of Benefits

 

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, 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 30, 2022, of $30.99 per share.

 

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) Upon a change in control or upon a Named Executive Officer’s termination of employment due to his death or disability, in each case, on December 31, 2022, acceleration of the outstanding performance share units is as follows:

Award        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%
  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 62% on December 31, 2022  
  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
 
Back to Contents
Award       Applicable Performance Period       Performance Level       Percentage of
Award Eligible to
Vest, Subject to
Performance Specified
in “Performance Level”
Column of this Table
2021 Absolute TSR PSU   One-year performance period ending April 15, 2023   Actual performance, which was trending at 62% on December 31, 2022  

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, 2022, acceleration of the outstanding performance share units is as follows:

 

  -  2023 Proxy Statement 70
 
Back to Contents
Award       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 period had been completed as of December 31, 2022
  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
2020 Relative TSR PSU   One-year performance period ended April 15, 2021   Actual performance achieved, or 150%   100% because the applicable performance period had been completed as of December 31, 2022
  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
 
Back to Contents
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