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EOG RESOURCES INC Annual Report (Amendment), Year Ended Dec 31, 1998

Filing Date
Filed April 30, 1999
Period End
December 31, 1998
Security
EOG
In the record · 2016–202610-K1110-Q328-K137

EOG filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K/A filed April 30, 1999. Cited figures are marked; the original filing is the authoritative source.

This document is Amendment No. 1 (Form 10-K/A) to the annual report of Enron Oil & Gas Company (the filing is labeled EOG in the request; the registrant named in the filing is Enron Oil & Gas Company, NYSE: common stock, $.01 par) for the fiscal year ended December 31, 1998.

It is a Part III-only amendment: it supplies director and executive officer information, executive compensation, security ownership, and related-party disclosures that were omitted from the original 10-K filed March 18, 1999. It contains no new financial statements, so it does not update revenue, earnings, reserves, or balance sheet figures; investors should refer to the original 10-K for those. The most important investor-relevant fact is control and related-party exposure.

Enron Corp. owns 82,270,000 shares, or 53.52% of the outstanding common stock (153,731,704 shares as of March 1, 1999), giving the parent effective control. Several Company directors and officers also hold Enron Corp. positions, and the Company has significant business relationships with Enron Corp., described in Part I of the original filing. Non-affiliate market value was about $1.11 billiona as of February 26, 1999.

Compensation and change-of-control terms are also material. The filing describes a retention bonus program triggered by a change of control, accelerated vesting of options and restricted stock upon announcement of a transaction, cash buyout options at 75% of Black-Scholes value for grants priced above $14.1875b, and multi-year employment agreements with severance of up to 2.99 times salary plus two times bonus for key executives.

These provisions could raise the cost of an acquisition. Chairman Forrest Hoglund's annual base salary is $570,000,c and CEO Mark Papa's is $400,020 with a 1998 bonus of $400,000.

02—Key points

Key Highlights

  1. Form 10-K/A Amendment No. 1 adds Part III information only (directors, executive compensation, ownership, related transactions); no new financial statements are included.
  2. Enron Corp. (parent) owns 82,270,000 shares, or 53.52% of the common stock, so it controls the Company.
  3. Non-affiliate market value of common stock was $1,108,372,096 as of February 26, 1999; 153,731,704 shares were outstanding as of March 1, 1999.
  4. Change-of-control protections include accelerated vesting of stock options and restricted stock, and a retention bonus equal to the February 1999 bonus, which may increase acquisition costs.
  5. Cash-out option for out-of-the-money grants: holders of options priced above $14.1875 may waive rights for 75% of Black-Scholes value upon a change of control.
  6. Executive pay for 1998: Mark Papa (President and CEO) salary $400,020 and bonus $400,000; Forrest Hoglund (Chairman) salary $570,000; Edmund Segner (Vice Chairman) bonus $350,000.
  7. Several directors and officers, including Causey, Derrick, Harrison, Lay, Skilling and Duncan, also hold positions at Enron Corp., raising related-party governance considerations.

03—Questions

Frequently Asked Questions

  1. Does this amendment contain updated financial results for 1998?

    No. Amendment No. 1 only contains Part III items (directors, executive compensation, security ownership, and related transactions). Financial statements and operating results are in the original Form 10-K filed March 18, 1999.

  2. Who controls the Company?

    Enron Corp. beneficially owns 82,270,000 shares, or 53.52% of Common Stock as of February 15, 1999, so it has effective control. Several directors and officers also serve in executive roles at Enron Corp.

  3. How could change-of-control provisions affect shareholders?

    A change of control would accelerate vesting of options and restricted stock, trigger retention bonuses, and provide severance of up to 2.99 times base salary plus two times bonus for involuntarily terminated executives within two years. These costs could raise the price an acquirer must pay, while the cash-out option for underwater grants reduces the value of options for holders above $14.1875.

  4. What are the compensation levels of the top executives?

    For 1998, Mark Papa received a $400,020 salary and $400,000 bonus, Forrest Hoglund received $570,000 salary and $570,000 bonus, and Edmund Segner received $320,833 salary and $350,000 bonus. Papa received 367,500 options and Segner 175,000 options at $14.1875 in September 1998.

  5. What is the board's committee structure and how often did it meet?

    The Audit Committee (chaired by Fred Ackman) met three times, the Compensation Committee (chaired by Edward Randall) met four times, and the International Strategy Committee (chaired by Frank Wisner) met three times in 1998. The Board held four regular and three special meetings, and the Company has no standing nominating committee.

04—Continue

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