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OMB APPROVAL |
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OMB Number:
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3235-0059 |
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Expires:
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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. )
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Filed by the Registrant
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Filed by a Party other than the Registrant o |
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Check the appropriate box: |
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o Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Noble Energy, Inc.
(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):
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þ No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11. |
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1) Title of each class of securities to which transaction applies: |
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2) Aggregate number of securities to which transaction applies: |
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
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4) Proposed maximum aggregate value of transaction: |
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o Fee paid previously with preliminary materials. |
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o Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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1) Amount Previously Paid: |
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2) Form, Schedule or Registration Statement No.: |
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SEC 1913 (11-01) |
Persons who are to respond to the collection of information
contained in this form are not required to respond unless the form displays a currently valid
OMB control number. |
NOBLE ENERGY, INC.
100 Glenborough Drive
Suite 100
Houston, Texas 77067
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 25, 2006
To the Stockholders of
Noble Energy, Inc.:
The annual meeting of stockholders of NOBLE ENERGY, INC., a
Delaware corporation (the Company), will be held on
Tuesday, April 25, 2006, at 9:30 a.m., Central Time,
at the Four Seasons Hotel, 1300 Lamar Street, Houston, Texas
77010-3098, for the following purposes:
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1. |
To elect the members of the Board of Directors of the Company to
serve until the next annual meeting of the Companys
stockholders; |
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2. |
To ratify the appointment of the independent auditor by the
Companys Audit Committee; |
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3. |
To consider a stockholder proposal, if properly presented at the
annual meeting; and |
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4. |
To transact such other business as may properly come before the
meeting and any adjournment or postponement thereof. |
The Board of Directors has fixed the close of business on
March 14, 2006 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the meeting
and any adjournment or postponement thereof. Only stockholders
of record at the close of business on the record date are
entitled to notice of, and to vote at, the meeting. A complete
list of the stockholders will be available for examination at
the offices of the Company in Houston, Texas during ordinary
business hours for a period of 10 days prior to the meeting.
A record of the Companys activities during 2005 and its
financial statements for the fiscal year ended December 31,
2005 are contained in the Companys 2005 Annual Report on
Form 10-K. The
Annual Report does not form any part of the material for
solicitation of proxies.
All stockholders are cordially invited to attend the meeting.
Stockholders are urged, whether or not they plan to attend
the meeting, to complete, date and sign the accompanying proxy
card and to return it promptly in the postage-paid return
envelope provided, or, alternatively, to vote their proxy by
telephone or the internet according to the instructions on the
proxy card. If a stockholder who has returned a proxy
attends the meeting in person, the stockholder may revoke the
proxy and vote in person on all matters submitted at the meeting.
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By Order of the Board of Directors of |
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Noble Energy, Inc.
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Arnold J. Johnson |
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Vice President, General Counsel and Secretary |
Houston, Texas
March 23, 2006
TABLE OF CONTENTS
NOBLE ENERGY, INC.
100 Glenborough Drive
Suite 100
Houston, Texas 77067
PROXY STATEMENT
For Annual Meeting of Stockholders
To Be Held On April 25, 2006
INTRODUCTION
The accompanying proxy, mailed together with this proxy
statement, is solicited by and on behalf of the Board of
Directors (the Board of Directors or
Board) of Noble Energy, Inc., a Delaware corporation
(the Company), for use at the annual meeting of
stockholders of the Company to be held at 9:30 a.m. Central
Time on Tuesday, April 25, 2006, at the Four Seasons Hotel,
1300 Lamar Street, Houston, Texas 77010-3098, and at any
adjournment or postponement thereof. The approximate date on
which this proxy statement and the accompanying proxy will first
be mailed to stockholders of the Company is March 23, 2006.
Shares represented by valid proxies will be voted at the meeting
in accordance with the directions given. If no directions are
given, the shares will be voted in accordance with the
recommendations of the Board of Directors unless otherwise
indicated. Any stockholder of the Company returning a proxy has
the right to revoke the proxy at any time before it is voted by
communicating the revocation in writing to Arnold J. Johnson,
Secretary, Noble Energy, Inc., 100 Glenborough Drive,
Suite 100, Houston, Texas 77067, or by executing and
delivering a proxy bearing a later date. No revocation by
written notice or by delivery of another proxy shall be
effective until the notice of revocation or other proxy, as the
case may be, has been received by the Company at or prior to the
meeting.
In order for an item of business proposed by a stockholder to be
considered properly brought before the annual meeting of
stockholders as an agenda item or to be eligible for inclusion
in the Companys proxy statement, the By-laws of the
Company require that the stockholder give written notice to the
Secretary of the Company. The notice must specify certain
information concerning the stockholder and the item of business
proposed to be brought before the meeting. The notice must be
received by the Secretary of the Company no later than 120
calendar days before the first anniversary of the release date
of the previous years annual meeting proxy statement;
provided, however, that in the event that (i) no annual
meeting was held in the previous year or (ii) the date of
the annual meeting has changed by more than 30 days from
the date of the previous years meeting, notice by the
stockholder must be received no later than the close of business
on the tenth day following the earlier of the day on which
notice of the meeting date was mailed or public disclosure of
the meeting date was made for such notice to be timely.
Accordingly, proper notice of a stockholder proposal for the
2007 annual meeting must be received by the Company no later
than November 23, 2006.
Throughout this proxy statement, all share and per share data
have been adjusted to reflect the Companys two-for-one
stock split, effected in the form of a stock dividend
distributed on September 14, 2005 to stockholders of record
as of August 1, 2005.
Voting Procedures and Tabulation
Holders of record of common stock of the Company may vote using
one of the following three methods:
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By Mail: Stockholders of record may vote by signing,
dating and returning the proxy card in the accompanying
postage-paid envelope. |
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By Telephone: Stockholders of record may call the
toll-free number on the accompanying proxy card to vote by
telephone, in accordance with the instructions set forth on the
proxy card and through voice prompts received during the call. |
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By Internet: By accessing the voting website listed on
the accompanying proxy card, stockholders of record may vote
through the internet in accordance with the instructions
included on the proxy card and on the voting website.
Stockholders electing to vote through the internet may incur
telephone and internet access charges. |
Proxies submitted by telephone or the internet are treated in
the same manner as if the stockholder had signed, dated and
returned the proxy card by mail. Therefore, stockholders of
record electing to vote by telephone or the internet should not
return their proxy cards by mail.
Stockholders whose shares of common stock of the Company are
held in the name of a bank, broker or other holder of record
(that is, street name) will receive separate
instructions from such holder of record regarding the voting of
proxies.
The Company will appoint one or more inspectors of election to
act at the meeting and to make a written report thereof. Prior
to the meeting, the inspectors will sign an oath to perform
their duties in an impartial manner and according to the best of
their ability. The inspectors will ascertain the number of
shares outstanding and the voting power of each, determine the
shares represented at the meeting and the validity of proxies
and ballots, count all votes and ballots, and perform certain
other duties as required by law.
The inspectors will tabulate the number of votes cast for, or
withheld from, each matter submitted at the meeting for a
stockholder vote. Votes that are withheld will be excluded
entirely from the vote and will have no effect. Under the rules
of the New York Stock Exchange (NYSE), brokers who
hold shares in street name have the discretionary authority to
vote on certain routine items when they have not
received instructions from beneficial owners. For purposes of
the 2006 annual meeting, routine items include the election of
directors and the ratification of the appointment of the
independent auditor. In instances where brokers are prohibited
from exercising discretionary authority and no instructions are
received from beneficial owners with respect to such item
(so-called broker non-votes), the shares they hold
will not be considered part of the voting power present and,
therefore, will have no effect on the vote. For purposes of the
2006 annual meeting, brokers will be prohibited from exercising
discretionary authority with respect to the stockholder proposal
requiring the separation of the positions of Chairman of the
Board and Chief Executive Officer.
CORPORATE GOVERNANCE
The Company is committed to integrity, reliability and
transparency in its disclosures to the public. To this end, the
Company adheres to corporate governance practices designed to
ensure that its business is conducted in the best interest of
its stockholders and in compliance with its legal and regulatory
obligations, including the corporate governance listing
standards of the NYSE and the rules and regulations of the
Securities and Exchange Commission (SEC). The
Company monitors developments in the area of corporate
governance.
Director Independence
The standards applied by the Board of Directors in affirmatively
determining whether a director is independent in
compliance with the listing standards of the NYSE generally
provide that a director is not independent if: (1) the
director is, or has been within the last three years, an
employee of the Company, or an immediate family member (defined
as including a persons spouse, parents, children,
siblings, mothers- and
fathers-in-law, sons-
and daughters-in-law,
brothers- and
sisters-in-law, and
anyone, other than domestic employees, who shares such
persons home) is, or has been within the last three years,
an executive officer, of the Company; (2) the director has
received, or has an immediate family member who has received,
during any twelve-month period within the last three years, more
than $100,000 per year in direct compensation from the
Company, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service); (3) (A) the director or an immediate family
member is a current partner of a firm that is the Companys
internal or external auditor; (B) the director is a current
employee of such a firm; (C) the director has an immediate
family member who is a current employee of such a firm and who
participates in the firms audit, assurance or
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tax compliance (but not tax planning) practice; or (D) the
director or an immediate family member was within the last three
years (but is no longer) a partner or employee of such a firm
and personally worked on the Companys audit within that
time; (4) the director or an immediate family member is, or
has been within the last three years, employed as an executive
officer of another company where any of the Companys
present executive officers at the same time serves or served on
that companys compensation committee; or (5) the
director is a current employee, or an immediate family member is
a current executive officer, of a company that has made payments
to, or received payments from, the Company for property or
services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1 million or 2% of such
other companys consolidated gross revenues. In addition to
these objective standards, the Board of Directors has adopted a
general standard, also in compliance with the NYSE listing
standards, to the effect that no director qualifies as
independent unless the Board of Directors
affirmatively determines that the director has no material
relationship with the Company that could interfere with the
directors ability to exercise independent judgment. The
Board of Directors exercises appropriate discretion in
identifying and evaluating the materiality of any relationships
directors may have with the Company or with parties that conduct
business with the Company.
The Board of Directors, applying the standards referenced above,
affirmatively determined that no material relationship existed
that would interfere with the ability of Jeffrey L. Berenson,
Michael A. Cawley, Edward F. Cox, Kirby L. Hedrick, Bruce A.
Smith and William T. Van Kleef to exercise independent judgment
and that each is independent for Board membership purposes
(considering, in the case of Mr. Cawley and Mr. Smith,
the matters described under the Certain Transactions
section of this proxy statement). The Board of Directors also
determined that all members of the Audit Committee, Corporate
Governance and Nominating Committee and Compensation, Benefits
and Stock Option Committee are independent.
Lead Independent Director and Executive Sessions
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The Company has an empowered Lead Independent Director,
currently Michael A. Cawley, who is elected annually by the
independent directors. The Lead Independent Directors
responsibilities and authority generally include consulting with
the Chairman to establish the agenda for each Board meeting,
presiding at all executive sessions of the independent directors
and all other Board meetings at which the Chairman is not
present, serving as a liaison between the Chairman and the
independent directors, coordinating the activities of the
independent directors, facilitating communications among the
other members of the Board, and consulting with the chairs of
the Board committees. The Lead Independent Directors
responsibilities and authority are more specifically described
in the Companys Corporate Governance Guidelines. |
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The Companys independent directors hold executive sessions
without management at regularly scheduled meetings of the Board.
These sessions take place outside the presence of the Chief
Executive Officer or any other Company employee. The Lead
Independent Director presides at these executive sessions, which
allows the independent directors the opportunity to separately
consider management performance and broader matters of strategic
significance to the Company. During 2005, the independent
directors met five times in executive sessions of the Board. |
Audit Committee
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All members of the Audit Committee have been determined to meet
the standards of independence required of audit committee
members by the NYSE and applicable SEC rules. See Director
Independence above. |
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The Board of Directors has determined that all members of the
Audit Committee are financially literate. Further, the Board of
Directors has determined that Bruce A. Smith and William T. Van
Kleef each possesses accounting or related financial management
expertise within the meaning of the |
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listing standards of the NYSE, and is an audit committee
financial expert within the meaning of applicable SEC
rules. |
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The Audit Committee operates under a charter adopted by the
Board of Directors that governs its duties and conduct. A copy
of the charter can be obtained free of charge from the
Companys website, www.nobleenergyinc.com, or
by written request to the Company at the address appearing on
the first page of this proxy statement to the attention of the
Corporate Secretary or by calling (281) 872-3100. |
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KPMG LLP, the Companys independent auditor, reports
directly to the Audit Committee. |
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The Audit Committee, consistent with the Sarbanes-Oxley Act of
2002 and the rules adopted thereunder, meets with management and
the Companys independent auditor prior to the filing of
officers certifications with the SEC to receive
information concerning, among other things, the integrity of the
Companys financial controls and reporting. |
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The Audit Committee has adopted a Policy on Reporting Concerns
and Complaints Regarding Accounting, Internal Accounting
Controls and Auditing Matters to enable confidential and
anonymous reporting to the Audit Committee of concerns regarding
questionable accounting matters. |
Compensation, Benefits and Stock Option Committee
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All members of the Compensation, Benefits and Stock Option
Committee (the Compensation Committee) have been
determined to meet the NYSE standards for independence. See
Director Independence above. Further, each member of
the Compensation Committee is a Non-Employee
Director as defined in
Rule 16b-3 under
the Securities Exchange Act of 1934 and an outside
director as defined for purposes of Section 162(m) of
the Internal Revenue Code of 1986, as amended. |
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The Compensation Committee operates under a charter adopted by
the Board of Directors that governs its duties and conduct. A
copy of the charter can be obtained free of charge from the
Companys website, www.nobleenergyinc.com, or
by written request to the Company at the address appearing on
the first page of this proxy statement to the attention of the
Corporate Secretary or by calling (281) 872-3100. |
Corporate Governance and Nominating Committee
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All members of the Corporate Governance and Nominating Committee
(the Governance Committee) have been determined to
meet the NYSE standards for independence. See Director
Independence above. |
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The Governance Committee operates under a charter adopted by the
Board of Directors that governs its duties and conduct. A copy
of the charter can be obtained free of charge from the
Companys website, www.nobleenergyinc.com, or
by written request to the Company at the address appearing on
the first page of this proxy statement to the attention of the
Corporate Secretary or by calling (281) 872-3100. |
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The Governance Committee considers candidates for Board
membership suggested by its members and other Board members, as
well as by management and stockholders. A stockholder who wishes
to recommend a prospective nominee for the Board should follow
the procedures described in this proxy statement under the
caption Evaluation of Director Nominees. |
Corporate Governance Guidelines
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The Company has adopted a set of Corporate Governance
Guidelines, including standards for director qualification and
director responsibilities. The guidelines can be obtained free
of charge from the Companys website,
www.nobleenergyinc.com, or by written request to
the Company at the address appearing on the first page of this
proxy statement to the attention of the Corporate Secretary or
by calling (281) 872-3100. |
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Codes of Business Conduct and Ethics
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The Company has adopted a Code of Business Conduct and Ethics
that sets out the Companys policy regarding laws and
business conduct, and contains a compilation of Company policies
relevant to business conduct and a process for reporting
violations thereof. A copy of the code can be obtained free of
charge from the Companys website,
www.nobleenergyinc.com, or by written request to
the Company at the address appearing on the first page of this
proxy statement to the attention of the Corporate Secretary or
by calling (281) 872-3100. |
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The Company has adopted a Code of Ethics for Chief Executive and
Senior Financial Officers, violations of which may be reported
to the Audit Committee. A copy of the code can be obtained free
of charge from the Companys website,
www.nobleenergyinc.com, or by written request to
the Company at the address appearing on the first page of this
proxy statement to the attention of the Corporate Secretary or
by calling (281) 872-3100. |
Personal Loans to Executive Officers and Directors
The Company complies with, and operates in a manner consistent
with, applicable law prohibiting extensions of credit in the
form of personal loans to, or for the benefit of, its directors
and executive officers.
Directors Attendance at Annual Meetings of Stockholders
All directors are expected to attend each annual meeting of
stockholders. A director who is unable to attend the annual
meeting, which it is understood will occur on occasion, is
expected to notify the Chairman of the Board in advance of such
meeting. Attendance at the annual meeting will be considered by
the Governance Committee in assessing each directors
performance. Last year, all directors attended the annual
meeting of stockholders.
Communication With the Board of Directors
Stockholders and other interested parties may contact any member
of the Board of Directors, any Board committee or any chair of
any such committee by mail, electronically or by calling the
Companys independent, toll-free compliance line. To
communicate by mail with the Board of Directors, any individual
director or any group or committee of directors, correspondence
should be addressed to the Board of Directors or any individual
director or group or committee of directors by either name or
title. All correspondence should be sent to Noble Energy, Inc.,
Attention: Corporate Secretary, at 100 Glenborough,
Suite 100, Houston, Texas 77067. To communicate with any of
the Companys directors electronically, stockholders should
go to the Companys website at
www.nobleenergyinc.com. Under the headings
Corporate Governance/ Corporate Governance
Guidelines, you will find a link under Exhibit 3
(Shareholder Communications with Directors) that may
be used for writing an electronic message to the Board of
Directors, any individual director, or any group or committee of
directors. In addition, stockholders may call the Companys
independent, toll-free compliance line listed on the
Companys website under the headings Corporate
Governance/ Audit Committee Complaints Policy.
All stockholder communications properly received will be
reviewed by the office of the Companys General Counsel to
determine whether the contents represent a message to the
Companys directors. Any contents that are not in the
nature of advertising, promotions of a product or service, or
patently offensive material will be forwarded promptly to the
appropriate director or directors.
VOTING SECURITIES
Only holders of record of common stock of the Company, par value
$3.331/3
per share, at the close of business on March 14, 2006, the
record date for the annual meeting, are entitled to notice of,
and to vote at, the meeting. A majority of the shares of common
stock entitled to vote, present in person or represented by
proxy, is necessary to constitute a quorum. Abstentions and
broker non-votes on filed proxies and ballots are
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counted as present for establishing a quorum. On the record date
for the annual meeting, there were issued and outstanding
178,667,209 shares of common stock. Each share of common
stock is entitled to one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following tabulation sets forth as of March 1, 2006
information with respect to the only persons who were known to
the Company to be beneficial owners of more than five percent of
the outstanding shares of common stock of the Company, based on
statements filed with the SEC pursuant to Section 13(g) or
13(d) of the Securities Exchange Act of 1934.
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Number of Shares |
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of Common Stock |
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Name and Address of Beneficial Owner |
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Beneficially Owned |
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of Class |
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AXA Financial, Inc.
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25,381,261 |
(1) |
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14.2% |
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Alliance Capital Management Company
1290 Avenue of the Americas
New York, NY 10104 |
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NWQ Investment Management Company, LLC
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23,088,058 |
(2) |
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13.0% |
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2049 Century Park East, 4th Floor
Los Angeles, CA 90067 |
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Wellington Management Company
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10,785,242 |
(3) |
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6.0% |
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75 State Street
Equity Department
Boston, MA 02109 |
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(1) |
Included in the shares of common stock that are beneficially
owned by AXA Financial, Inc. are (i) 25,347,749 shares
beneficially owned by Alliance Capital Management L.P., a
subsidiary of AXA Financial, Inc., solely for investment
purposes on behalf of client discretionary investment advisory
accounts, and (ii) 33,512 shares directly held by AXA
Equitable Life Insurance Company. Alliance Capital Management
L.P. has sole voting power with respect to
19,557,093 shares of common stock, shared voting power with
respect to 550,160 shares of common stock, and sole
dispositive power with respect to 25,347,749 shares of
common stock. |
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(2) |
Includes shares of common stock beneficially owned by clients of
NWQ Investment Management Company, LLC, which clients may
include investment companies registered under the Investment
Company Act of 1940, as amended, and/or employee benefit plans,
pension funds, endowment funds or other institutional clients.
NWQ has sole voting power with respect to 20,090,240 shares
of common stock and sole dispositive power with respect to
23,088,058 shares of common stock. |
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(3) |
Wellington Management Company, in its capacity as investment
adviser, may be deemed to beneficially own
10,785,242 shares of common stock, which are held of record
by clients of Wellington Management Company. Wellington has
shared voting power with respect to 6,536,980 shares of
common stock and shared dispositive power with respect to
10,785,242 shares of common stock. |
PROPOSAL I
ELECTION OF DIRECTORS
As of the date of this proxy statement, the Companys Board
of Directors consists of eight directors, six of whom are
independent. Information regarding the business experience of
each nominee is provided below. All directors are elected
annually to serve until the next annual meeting and until
successors are elected.
Directors are elected by plurality vote of the shares present at
the annual meeting, meaning that the director nominee with the
most affirmative votes for a particular slot is elected for that
slot. The proxyholders will vote in favor of the eight persons
listed below unless contrary instructions are given.
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If you sign your proxy card but do not give instructions with
respect to the voting of directors, your shares will be voted
for the eight persons recommended by the Board of Directors,
except where authorization to do so is withheld.
The Board of Directors expects that all of the nominees will be
available to serve as directors as indicated. In the event that
any nominee should become unavailable, however, the proxyholders
will vote for a nominee or nominees who would be designated by
the Board of Directors unless the Board of Directors chooses to
reduce the number of directors serving on the Board of Directors.
Company Nominees for Director
Jeffrey L. Berenson Mr. Berenson,
age 55, is President and Chief Executive Officer of
Berenson & Company, a private investment banking firm
in New York City that he co-founded in 1990. From 1978 until
co-founding Berenson & Company, Mr. Berenson was
with Merrill Lynchs Mergers and Acquisitions department,
becoming head of that department in 1986 and then co-head of its
Merchant Banking unit in 1988. He was appointed to the Board of
Directors of Patina Oil & Gas Corporation in December
2002 and joined the Companys Board of Directors upon
completion of the Companys merger with Patina on
May 16, 2005. Mr. Berenson is also a member of the
Board of Directors of Epoch Holdings Corporation.
Michael A. Cawley Mr. Cawley,
age 58, has served as President and Chief Executive Officer
of The Samuel Roberts Noble Foundation, Inc. (the
Foundation) since February 1, 1992, after
serving as Executive Vice President of the Foundation since
January 1, 1991. Prior to 1991, Mr. Cawley was the
President of Thompson, Cawley, Veazey & Burns, a
professional corporation, attorneys at law. Mr. Cawley has
served as a trustee of the Foundation since 1988 and is also a
director of Noble Corporation. He has served as a director of
the Company since 1995 and its Lead Independent Director since
2001.
Edward F. Cox Mr. Cox, age 59, has
been a partner in the law firm of Patterson Belknap
Webb &
Tyler llp, New
York, New York for more than five years and serves as the chair
of the firms corporate department. Mr. Cox has served
as a director of the Company since 1984.
Charles D. Davidson Mr. Davidson,
age 56, has served as President and Chief Executive Officer
of the Company since October 2000 and has served as Chairman of
the Board since April 2001. Prior to October 2000, he served as
President and Chief Executive Officer of Vastar Resources, Inc.
(Vastar) from March 1997 to September 2000 (Chairman
from April 2000) and was a Vastar director from March 1994 to
September 2000. From September 1993 to March 1997, he served as
a Senior Vice President of Vastar. From 1972 to October 1993, he
held various positions with ARCO.
Thomas J. Edelman Mr. Edelman,
age 55, founded Patina Oil & Gas Corporation and
served as its Chairman and Chief Executive Officer from its
formation in 1996 until its May 2005 merger with the Company. He
co-founded Snyder Oil Corporation and was its President from
1981 through 1997. From 1980 to 1981, he was with The First
Boston Corporation and from 1975 through 1980, with Lehman
Brothers Kuhn Loeb Incorporated. Mr. Edelman serves as
Chairman of Bear Cub Investments LLC. He joined the
Companys Board of Directors upon completion of the
Companys merger with Patina on May 16, 2005.
Kirby L. Hedrick Mr. Hedrick,
age 53, served as Executive Vice President over upstream
operations for Phillips Petroleum Company from 1997 until his
retirement in 2000. Mr. Hedrick was elected to the
Companys Board of Directors on August 1, 2002.
Bruce A. Smith Mr. Smith, age 62,
has served as President and Chief Executive Officer of Tesoro
Corporation since 1995 and has served as its Chairman since
1996. Mr. Smith joined Tesoro in 1992. He was elected to
the Companys Board of Directors on March 6, 2002.
William T. Van Kleef Mr. Van Kleef,
age 54, served in executive management positions at Tesoro
Corporation from 1993 to 2005, most recently as Tesoros
Executive Vice President and Chief Operating Officer. During his
tenure at Tesoro, Mr. Van Kleef held various positions,
including President, Tesoro Refining and Marketing, and
Executive Vice President and Chief Financial Officer. Before
joining Tesoro, Mr. Van Kleef, a Certified Public
Accountant, served in various financial and accounting positions
with
7
Damson Oil from 1982 to 1991, most recently as Senior Vice
President and Chief Financial Officer. He joined the
Companys Board of Directors on November 11, 2005.
Generally, the Companys By-laws provide that a stockholder
must deliver written notice to the Secretary of the Company no
later than 90 calendar days prior to the annual meeting naming
the stockholders nominee(s) for director and specifying
certain information concerning the stockholder and nominee(s).
Accordingly, a stockholders nominee(s) for director to be
presented at the 2007 annual meeting of stockholders must be
received by the Company no later than January 24, 2007.
The Board of Directors unanimously recommends that
stockholders vote FOR the election of each of the Boards
nominees.
INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors held fourteen meetings in 2005,
consisting of five regular meetings, the annual organizational
meeting and eight special meetings.
Evaluation of Director Nominees
The Governance Committee believes that the minimum
qualifications for serving as a director of the Company are that
a nominee demonstrate, by significant accomplishment in his or
her field, an ability to make a meaningful contribution to the
Board of Directors oversight of the business and affairs
of the Company and have an impeccable record and reputation for
honest and ethical conduct in both his or her professional and
personal activities. Nominees for director shall be those people
who, after taking into account their skills, expertise,
integrity, diversity, character, judgment, age, independence,
corporate experience, length of service, potential conflicts of
interest and commitments (including, among other things, service
on the boards or comparable governing bodies of other public
companies, private business companies, charities, civic bodies
or similar organizations) and other qualities, are believed to
enhance the Boards ability to manage and direct, in an
effective manner, the affairs and business of the Company,
including, when applicable, to enhance the ability of committees
of the Board of Directors to fulfill their duties and/or to
satisfy any independence requirements imposed by law, regulation
or listing standards of the NYSE.
In general, nominees for director should have an understanding
of the workings of large business organizations such as the
Company and senior level executive experience, as well as the
ability to make independent, analytical judgments, the ability
to be an effective communicator and the ability and willingness
to devote the time and effort to be an effective and
contributing member of the Board of Directors. In addition, the
Governance Committee will examine a candidates specific
experiences and skills, time availability in light of other
commitments, potential conflicts of interest and independence
from management and the Company. The Governance Committee will
also seek to have the Board of Directors represent a diversity
of backgrounds, experience, gender and race.
The Governance Committee will identify potential nominees by
asking current directors and executive officers to notify the
Governance Committee if they become aware of persons, meeting
the criteria described above, who have had a change in
circumstances that might make them available to serve on the
Board of Directors for example, retirement as a CEO
or CFO of a public company or exiting government or military
service or business and civic leaders in the communities in
which the Companys facilities are located. The Governance
Committee also, from time to time, will engage firms that
specialize in identifying director candidates. The Governance
Committee will also consider candidates recommended by
stockholders.
Once a person has been identified by the Governance Committee as
a potential candidate, the Governance Committee may collect and
review available information regarding the person to assess
whether the person should be considered further. If the
Governance Committee determines that the candidate warrants
further consideration, the Governance Committee Chair or another
member of the Governance Committee will contact the person.
Generally, if the person expresses a willingness to be
considered and to serve on the Board of Directors, the
Governance Committee will request information from the
candidate, review the persons accomplishments and
qualifications, including in light of any other candidates that
the
8
Governance Committee might be considering, and conduct one or
more interviews with the candidate. In certain instances,
Governance Committee members may contact one or more references
provided by the candidate or may contact other members of the
business community or other persons that may have greater
first-hand knowledge of the candidates accomplishments.
The Governance Committees evaluation process will be the
same whether or not a candidate is recommended by a stockholder,
although the Board of Directors may take into consideration the
number of shares held by the recommending stockholder and the
length of time that such shares have been held.
The Governance Committee will consider director nominees of
stockholders, provided that such recommendations are made in
writing to the attention of the Corporate Secretary and received
by the Corporate Secretary not less than 90 days in advance
of an annual stockholder meeting. A stockholder must include the
following information with each recommendation for a director
nominee:
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The name and address of the stockholder and evidence of the
persons ownership of Company stock, including the number
of shares owned and the length of time of ownership; |
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Whether the stockholder intends to appear in person or by proxy
at the annual stockholders meeting to make the nomination; |
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A description of all arrangements or understandings between the
stockholder and the nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
is made; and |
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The name of the candidate, the candidates resumé or a
listing of his or her qualifications to be a director of the
Company and the persons consent to be named as a director
if selected by the Governance Committee and nominated by the
Board of Directors. |
Committees of the Board of Directors
The Board of Directors has four standing committees, whose
names, current members and purposes are as follows:
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Audit Committee Bruce A. Smith, Chair;
Michael A. Cawley; Kirby L. Hedrick; and William T. Van Kleef.
The primary purpose of the Audit Committee is to:
(1) assist the Board of Directors in fulfilling its
responsibility to oversee the integrity of the Companys
financial statements, the Companys compliance with legal
and regulatory requirements, the independent auditors
qualifications and independence, and the performance of the
Companys internal audit function and independent auditor
and (2) prepare a committee report as required by the SEC
to be included in the Companys annual proxy statement. The
Audit Committee held ten meetings during 2005. For more details,
see information under the section Report of the Audit
Committee. |
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Compensation, Benefits and Stock Option
Committee Kirby L. Hedrick, Chair; Edward F.
Cox; and Bruce A. Smith. The purpose of the Compensation,
Benefits and Stock Option Committee is to: (1) review and
approve corporate goals and objectives in the areas of:
(a) salary and bonus compensation, (b) benefits, and
(c) equity-based compensation, as these areas relate to the
Chief Executive Officer (CEO), evaluating the
CEOs performance based on those goals and objectives and,
either as a committee or together with the other independent
directors (as directed by the Board of Directors), determine and
approve the CEOs compensation level based on that
evaluation; (2) make recommendations to the Board with
respect to non-CEO executive officer compensation,
incentive-compensation plans and equity-based plans that are
subject to board approval; and (3) produce a committee
report on executive compensation as required by the SEC to be
included in the Companys annual proxy statement or annual
report on
Form 10-K. The
Board of Directors has delegated to the Compensation Committee
authority to determine and approve the Companys
compensation philosophy; the annual salary, bonus, equity-based
compensation and other benefits applicable to executive officers
of the Company other than the CEO; and
equity-based
compensation applicable to
non-executive
employees. The Compensation, Benefits and Stock Option Committee
held ten meetings during 2005. For more details, see information |
9
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under the section Report of the Compensation, Benefits and
Stock Option Committee on Executive Compensation. |
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Corporate Governance and Nominating Committee
Michael A. Cawley, Chair; Jeffrey L. Berenson; Edward F. Cox;
Kirby L. Hedrick; Bruce A. Smith; and William T. Van Kleef. The
overall purpose of the Corporate Governance and Nominating
Committee is: (1) to take a leadership role in providing a
focus on corporate governance to enable and enhance the
Companys short and long-term performance; (2) to
engage in appropriate identification, selection, retention and
development of qualified directors consistent with criteria
approved by the Board; (3) to develop, and recommend to the
Board, a set of corporate governance principles or guidelines
applicable to the Company; (4) to advise the Board with
respect to the Boards composition, procedures and
committees; and (5) to oversee the evaluation of the Board
and management. The Corporate Governance and Nominating
Committee held six meetings during 2005. |
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Environment, Health and Safety Committee
Edward F. Cox, Chair; Charles D. Davidson; Thomas J. Edelman;
and Kirby L. Hedrick. The overall purpose of the Environment,
Health and Safety Committee is to assist the Board of Directors
in determining whether the Company has appropriate policies and
management systems in place with respect to environment, health
and safety (EH&S) matters and to monitor and
review compliance with applicable EH&S laws, rules and
regulations. The Environment, Health and Safety Committee held
five meetings during 2005. |
Each director attended at least 75% of the meetings of the Board
of Directors and its committees of which such director was a
member during 2005.
Compensation Committee Interlocks and Insider
Participation
Kirby L. Hedrick, Edward F. Cox and Bruce A. Smith served on the
Compensation Committee during 2005. There were no Compensation
Committee interlocks nor insider (employee) participation
during 2005.
Compensation of Directors
The 2005 director compensation program consisted of two
principal elements, which are discussed below: annual retainer
and committee fees and equity grants of stock options and
restricted stock. The Governance Committee reviews the director
compensation program annually.
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Annual Retainer and Committee Fees: Directors who are not
officers of the Company or any of its subsidiaries
(non-employee directors) receive an annual retainer
of $37,500 and a fee of $1,000 for each Board of Directors or
committee meeting attended. With the exception of the Audit
Committee, the chair of each committee, if not also an employee
or officer of the Company, receives an additional annual fee of
$5,000. The chair of the Governance Committee, Mr. Cawley,
has elected to waive the chairs fee. The chair of the
Audit Committee receives an additional $15,000 annual fee. The
position of Lead Independent Director, which is
filled by a non-employee director, receives an additional annual
fee of $20,000. Non-employee directors are entitled to the
benefit of the Companys Non-Employee Director Fee Deferral
Plan. Under the terms of this plan, non-employee directors may,
during a specified period of time each year, elect to have all
or any portion of their director fees deferred for future
payment by the Company. The Company also reimburses directors
for travel, lodging and related expenses they incur in attending
Board of Directors and committee meetings. |
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Equity Grants: The 2005 Stock Plan for Non-Employee
Directors of Noble Energy, Inc. (the 2005 Plan) was
approved by the stockholders of the Company at the
April 26, 2005 annual meeting. The purposes of the 2005
Plan are to provide each non-employee director of the Company
with an added incentive to continue in the service of the
Company and a more direct interest in the future success of the
operations of the Company by granting to such directors options
to purchase shares of the Companys common stock and awards
of restricted shares of the Companys common stock. The
2005 Plan provides for a fixed grant of stock options and award
of restricted stock upon the directors joining the
Companys Board of Directors and thereafter annually on
each February 1 during the term of the plan. In addition, |
10
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the Board of Directors has the discretion, subject to certain
limitations, to grant stock options and award restricted stock
to the non-employee directors in addition to the February 1
automatic grant and to determine the restrictions, terms and
conditions applicable to such grants and awards. |
PROPOSAL II
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
The Audit Committee of the Board of Directors has appointed the
firm of KPMG LLP to serve as independent auditor of the Company
for the fiscal year ending December 31, 2006. This firm has
audited the accounts of the Company since May 2002. Although
action by the stockholders on this matter is not required, the
Audit Committee believes that it is important to seek
stockholder ratification of this appointment in light of the
critical role played by the independent auditor in maintaining
the integrity of Company financial controls and reporting.
One or more representatives of KPMG LLP are expected to be
present at the annual meeting, will be able to make a statement
if they so desire, and will be available to respond to
appropriate questions.
The Board of Directors unanimously recommends that
stockholders vote FOR ratification of the appointment of
KPMG LLP as independent auditor.
PROPOSAL III
STOCKHOLDER PROPOSAL ON INDEPENDENT BOARD CHAIRMAN
The owner of approximately 19,722 shares of common stock
has advised the Company that it intends to present the following
resolution at the annual meeting of stockholders. In accordance
with the applicable proxy statement regulations, the proposed
resolution and supporting statement, for which the Board of
Directors and the Company accept no responsibility, are set
forth below. Approval of this proposal would require the
affirmative vote of a majority of the outstanding shares of the
Company stock present in person or by proxy and entitled to vote
at the annual meeting. The Company will provide to any
stockholder the name and address of the proposing stockholder
upon receiving an oral or written request from such stockholder.
The Board of Directors unanimously opposes, and recommends
that stockholders vote
AGAINST, the adoption of this stockholder proposal.
Resolved: that Noble Energy, Inc. shareholders recommend
that the Board of Directors revise the Corporate Governance
Guidelines of the Company to establish a policy of separating
the positions of Chairman of the Board of Directors and Chief
Executive Officer so that the Chairman of the Board of Directors
will be an independent member of the Board, except in explicitly
spelled out extraordinary circumstances.
Supporting Statement:
It is the responsibility of the Board of Directors
(Board) to protect shareholders interest by
providing independent and objective oversight of management. By
separating the position of Chairman of the Board of Directors
(Chairman) and Chief Executive Officer
(CEO), the company will promote greater management
accountability to shareholders and it lead to a more objective
evaluation of management.
The Chairman controls the flow of information between management
and the Board and also is the final determiner of the Board
meeting agendas and Board strategies. Consequently, a CEO who
also acts as Chairman has great power to influence the
information received by the Board. The CEO has a personal
interest in conveying information that reflects well on his or
her performance. Thus, when the CEO also acts as Chairman, a
conflict of interest can arise and the CEO may not adequately
represent the interests of shareholders or provide impartial
leadership. A non-CEO Chairman, on the other hand, can provide an
11
independent assessment of management, strengthen the
Boards credibility, and improve shareholder confidence in
the corporation.
An objective and independent Board leader can provide the
necessary oversight of management. In light of recent corporate
scandals, investors must be able to rely on the Board to provide
an impartial review of management and its affairs. Merely
requiring that the majority of the Board be independent and
establishing a Lead Independent Director are not sufficient to
prevent the type of scandal that affected Enron, WorldCom and
Tyco. These corporations had a majority of independent directors
on the Board when the scandal occurred. Each company also had an
insider serving as Chairman. Shareholders cannot derive
confidence solely from the fact that a majority of the members
of the Board of Directors of a company are independent when the
CEO serves as Chairman.
Because of this very concern, separating the roles of Chairman
and CEO is a growing trend in the effort to reform the way
corporations operate. According to a 2003 report in The
Corporate Board Member Magazine, hundreds of
U.S. companies, including about one-quarter of those listed
on Standard & Poors 500 stock index, have already
split the two positions. Furthermore, a 2004 survey published in
McKinsey Quarterly, found that two-thirds of directors
favor splitting the Chairman and CEO positions.
This proposal would enhance management accountability to
shareholders by ensuring that an independent director, rather
than a party with a potential conflict of interest, serves as
Chairman and controls the information and agenda presented to
the Board of Directors.
Based on the considerations outlined above, I urge you to
vote FOR this proposal.
Board of Directors Response:
The Board strongly endorses the view that one of its primary
functions is to protect stockholders interests by
providing independent and objective oversight of management,
including the Chief Executive Officer. However, the Board does
not believe that mandating a particular structure, such as
separate Chairman and Chief Executive Officer status, is
necessary to achieve independent oversight of management.
Rather, the Board believes that the interests of the Company and
its stockholders are best served at this time by the leadership
and direction provided by a full-time Chairman and Chief
Executive Officer, with an empowered Lead Independent Director
serving as a key component of the Companys governance
structure, subject to oversight by the independent members of
the Board.
The Board believes that it should be free to exercise its
judgment to determine who should serve as Chairman at any
particular point in time in light of the Companys
then-current and anticipated future circumstances. The proposal
submitted by a stockholder of the Company would mandate a
particular structure and deprive the Board of its flexibility to
organize its functions and conduct its business in the manner it
deems in the best interests of the Company and its stockholders.
Independent directors make up a substantial majority of
the Board.
The Board has been, and continues to be, a strong proponent of
Board independence. Currently, six of the eight members of the
Board are independent directors under the applicable NYSE
listing standards and SEC rules. Each director is a full and
equal participant in the major strategic, oversight and policy
decisions of the Company. While the six independent directors
comprise a substantial majority of the Board, the Boards
Audit Committee, Compensation, Benefits and Stock Option
Committee and Corporate Governance and Nominating Committee
consist entirely of independent directors. Moreover, the Board,
and each committee of the Board, has the power to hire
independent legal, financial, accounting, or other advisors, as
it may deem necessary, without consulting or obtaining the
approval of any officer of the Company in advance. The Board
believes that this structure provides effective independent
oversight of the Companys management and key issues
related to long-range business plans, long-range strategic
issues and risks, ethics and integrity.
12
The Lead Independent Director is empowered with specific
responsibilities and duties.
The Company already has an empowered Lead Independent Director
who is elected annually by the non-management directors. The
Lead Independent Directors responsibilities and authority
are clearly defined in the Corporate Governance Guidelines
posted on the Companys website and include the following:
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Consulting with the Chairman to establish the agenda for each
Board meeting; |
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Presiding at all executive sessions of the independent directors; |
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Coordinating the activities of the independent directors; |
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Coordinating the agenda for and moderating sessions of the
Boards independent directors and other non-management
directors; |
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Facilitating communications among the other members of the
Board; and |
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Consulting with the chairs of the appropriate Board committees
and soliciting their participation to avoid diluting the
authority or responsibilities of those committee chairs. |
The Board considers the Lead Independent Director to be a key
component of the Companys overall corporate governance
structure and believes that this empowered Lead Independent
Director provides strong and independent oversight of the
Companys management and business affairs.
The fully independent Compensation, Benefits and Stock
Option Committee regularly evaluates the performance and
compensation of the Chief Executive Officer.
The Board strongly endorses the independent review, evaluation
and compensation of the Companys Chief Executive Officer.
The Compensation, Benefits and Stock Option Committee, which is
comprised entirely of independent directors, annually reviews
and approves corporate goals and objectives relevant to the
compensation of the Chief Executive Officer, evaluates the
performance of the Chief Executive Officer in light of those
goals and objectives, and sets the compensation of the Chief
Executive Officer based on this evaluation, without the
participation of the Chief Executive Officer or other directors,
if any, who are members of management.
The fully independent Corporate Governance and Nominating
Committee is responsible for planning for the succession of the
Chief Executive Officer.
The Boards Corporate Governance and Nominating Committee
conducts an annual review on succession planning (including
policies regarding succession in the event of an emergency),
evaluating potential successors to the Chief Executive Officer.
The Governance Committee also conducts a similar annual review
of succession planning for other Company officer positions.
Independent directors meet separately in executive
sessions on a regular basis.
An executive session of the independent directors without
management is scheduled at each regularly scheduled meeting of
the Board. These sessions take place outside the presence of the
Chief Executive Officer or any other Company employee. The Lead
Independent Director presides at these executive sessions, which
allows the independent directors the opportunity to separately
consider management performance and broader matters of strategic
significance to the Company.
Recent data indicates that the vast majority of the
largest U.S. public companies do not have a separate
chairman and chief executive officer.
The February 2006 edition of the Corporate
Compliance & Regulatory Newsletter reports that the
vast majority of the 100 largest publicly listed
U.S. companies continue to have a single person serve as
both the chairman and chief executive officer. As of
June 15, 2005, only 19 of the largest 100 companies
had chairmen who were not also serving as CEO, compared with 14
of such companies in 2003 and 2004. Furthermore, of those
19 companies that have a separate chairman and CEO
structure, only four of those companies have
13
implemented explicit policies requiring separation of the two
positions. According to Corporate Compliance, this
nominal increase is not evidence of a growing trend but rather
the result of a few well-publicized instances of extreme
stockholder dissatisfaction with, and the ultimate resignation
of, a companys chief executive officer. In fact, the
number of stockholder proposals advocating an independent board
chairman have fallen over the last three years. Corporate
Compliance also reports that the data during that period
suggests that those instances in which different individuals
serve as chairman of the board and CEO are more closely related
to a companys CEO succession process rather than the
adoption of a specific corporate governance policy.
Likewise, as of January 1, 2006, 13 of the Companys
16 peer group companies, or approximately 81%, had a single
person serving as both the chairman and CEO according to the
most recent proxy statements and other available SEC filings.
Furthermore, only one of the 16 peer group companies had an
independent chairman and no member of the Companys peer
group had a policy requiring the appointment of an independent
board chairman.
The interests of the Company and its stockholders have
been well-served by the current Chairman and
Chief Executive Officer.
The Chief Executive Officer bears primary responsibility for
managing the Companys business day to day. As such, the
Board believes that the Chief Executive Officer is the person in
the best position to ensure that key business issues and
stakeholder interests are brought to the Boards attention.
In addition, the Lead Independent Director may request the
inclusion of specific agenda items for Board meetings as is
stipulated in the Companys Corporate Governance Guidelines.
The Board believes that the Company is strengthened by the
chairmanship of Mr. Charles D. Davidson, who provides
strategic, operational, and technical expertise, vision and a
proven ability to lead the Company to the successes it has
experienced. Under Mr. Davidsons leadership, the
Company has continued to reflect solid growth and increasing
profits. The Board believes that under present circumstances the
interests of the Company and its stockholders are best served by
the leadership and direction of Mr. Davidson as Chief
Executive Officer and Chairman.
For the foregoing reasons, the Board of Directors unanimously
opposes, and recommends that stockholders vote AGAINST, the
adoption of the stockholder proposal.
14
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following tabulation sets forth, as of March 1, 2006,
the shares of common stock beneficially owned by each director,
each named executive officer listed in the Summary Compensation
Table included elsewhere in this proxy statement, and all
directors and named executive officers as a group.
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Common Stock Beneficially Owned(1) |
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Number of |
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Percent of |
Name |
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Shares |
|
Class |
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Director
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Jeffrey L. Berenson
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37,995 |
(2)(6) |
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|
0.02 |
% |
Michael A. Cawley
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|
53,175 |
(2)(3)(6) |
|
|
0.03 |
% |
Edward F. Cox
|
|
|
51,577 |
(2)(6) |
|
|
0.03 |
% |
Charles D. Davidson
|
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|
735,208 |
(2)(4)(6) |
|
|
0.41 |
% |
Thomas J. Edelman
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|
5,329,703 |
(2)(5)(6)(7) |
|
|
2.98 |
% |
Kirby L. Hedrick
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|
|
53,577 |
(2)(6) |
|
|
0.03 |
% |
Bruce A. Smith
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54,577 |
(2)(6) |
|
|
0.03 |
% |
William T. Van Kleef
|
|
|
16,377 |
(6) |
|
|
0.01 |
% |
Named Executive Officers(excluding any director named
above) |
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Alan R. Bullington
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137,815 |
(2)(4)(6) |
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|
0.08 |
% |
Susan M. Cunningham
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175,694 |
(2)(6) |
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|
0.10 |
% |
David L. Stover
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82,791 |
(2)(6) |
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|
0.05 |
% |
Chris Tong
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48,559 |
(2)(6) |
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|
0.03 |
% |
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All directors and named executive officers as a group
(12 persons)
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6,777,048 |
(2)(3)(4)(5)(6)(7) |
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3.79 |
% |
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(1) |
Unless otherwise indicated, all shares are directly held with
sole voting and investment power. |
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(2) |
Includes shares not outstanding but subject to options that are
currently exercisable (or that will become exercisable on or
before April 30, 2006), as follows:
Mr. Berenson 18,794 shares;
Mr. Cawley 50,000 shares;
Mr. Cox 22,000 shares;
Mr. Davidson 661,338 shares;
Mr. Edelman 1,679,854 shares;
Mr. Hedrick 50,000 shares;
Mr. Smith 50,000 shares;
Mr. Bullington 117,775 shares;
Ms. Cunningham 160,590 shares;
Mr. Stover 68,775 shares; and
Mr. Tong 21,861 shares. |
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(3) |
Mr. Cawley is one of eleven trustees of The Samuel Roberts
Noble Foundation, Inc. The Samuel Roberts Noble Foundation, Inc.
holds of record 2,017,266 shares of Company common stock.
As with other corporate action, the voting of the shares held by
the Foundation requires a majority vote of its trustees at a
meeting at which a quorum of trustees is present. Where there
are multiple trustees of a company and a majority vote is
required for corporate action, no individual trustee is deemed
to have beneficial ownership of securities held by such company.
Accordingly, the 2,017,266 shares held of record by the
Foundation are not reflected in Mr. Cawleys
beneficial ownership of common stock. |
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(4) |
Includes shares not outstanding but indirectly held in a
qualified 401(k) Plan, as follows: Mr. Davidson
2,669 shares and Mr. Bullington
8,353 shares. |
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(5) |
Included in the shares that are beneficially owned by
Mr. Edelman are 68,572 shares of common stock in which
shared dispositive power and sole voting power are held by his
spouse. |
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(6) |
Includes restricted stock awards not currently vested, as
follows: Mr. Berenson 6,377 shares;
Mr. Cawley 1,577 shares;
Mr. Cox 1,577 shares;
Mr. Davidson 66,201 shares; Mr
Edelman 6,377 shares;
Mr. Hedrick 1,577 shares;
Mr. Smith 1,577 shares; Mr. Van
Kleef 6,377 shares;
Mr. Bullington 11,687 shares;
Ms. Cunningham 15,104 shares;
Mr. Stover 14,016 shares; and
Mr. Tong 26,698 shares. |
|
(7) |
Includes 2,320,000 shares held under the Companys and
certain other nonqualified deferred compensation plans. |
15
EXECUTIVE COMPENSATION
The following report of the Compensation, Benefits and Stock
Option Committee of the Board of Directors and the information
under the section Performance Graph shall not be
deemed to be soliciting material or to be
filed with the SEC or subject to the SECs
proxy rules, except for the required disclosure in this proxy
statement, or subject to the liabilities of Section 18 of
the Securities Exchange Act of 1934 (the Exchange
Act), and the information shall not be deemed to be
incorporated by reference into any filing made by the Company
under the Securities Act of 1933 or the Exchange Act.
REPORT OF THE COMPENSATION, BENEFITS
AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
To the Stockholders of
Noble Energy, Inc.:
The purpose of the Compensation, Benefits and Stock Option
Committee (the Compensation Committee) is to:
(1) review and approve corporate goals and objectives in
the areas of: (a) salary and bonus compensation,
(b) benefits, and (c) equity-based compensation, as
these areas relate to the Chief Executive Officer
(CEO), evaluating the CEOs performance based
on those goals and objectives and, either as a committee or
together with the other independent directors (as directed by
the Board of Directors), determine and approve the CEOs
compensation level based on that evaluation; (2) make
recommendations to the Board with respect to non-CEO executive
officer compensation, incentive compensation plans and
equity-based plans that are subject to Board of Directors
approval; and (3) produce a committee report on executive
compensation as required by the SEC to be included in the
Companys annual proxy statement or annual report on
Form 10-K. The
Board of Directors has delegated to the Compensation Committee
authority to determine and approve the Companys
compensation philosophy; the annual salary, bonus, equity-based
compensation and other benefits applicable to executive officers
of the Company other than the CEO; and equity-based compensation
applicable to non-executive employees. The Compensation
Committee held ten meetings during 2005.
Compensation Philosophy
The Companys compensation philosophy is to pay employees
for the value of their contributions, recognizing differences in
individual performance through the various components of total
compensation. Total compensation consists of base salary,
incentives and benefits. The Companys objective is to
provide a total compensation program that is flexible enough to
respond to changing market conditions and that also aligns
compensation levels with sustained performance compared to
industry benchmarks. The Companys compensation philosophy
is evaluated annually.
The executive compensation policy of the Company, which is
endorsed by the Compensation Committee, is to provide a
compensation program that will attract, motivate and retain
persons of high quality and will support a long-standing
internal culture of loyalty and dedication to the interests of
the Company. In administering the executive compensation
program, the Compensation Committee is mindful of the following
principles and guidelines.
Base salaries for executive officers should be competitive with
comparable positions in peer companies. A sufficient portion of
annual compensation should be at risk in order to align the
interests of executives with those of stockholders of the
Company. This variable part of annual compensation should
reflect both corporate and individual performance. As a
persons level of responsibility increases, a greater
portion of total compensation should be at risk and the mix of
total compensation should be weighted more heavily in favor of
incentive-based compensation. Stock options, restricted stock
and performance units together provide a balanced long-term
incentive program that aligns the interests of our stockholders
and our executives toward the enhancement of stockholder value.
16
Components of Compensation Program
The 2005 executive compensation program consisted of three
principal elements, which are discussed below: base salary, a
short-term incentive plan and a long-term incentive plan.
|
|
|
Base Salary: Base salary for executive officer positions
is determined principally by competitive factors. The Company
obtains information through participation in oil and gas
industry compensation surveys conducted by independent
compensation consultants. These surveys, which address base
salary and other compensation components, provide a comparative
analysis of executive compensation considering similar positions
in peer companies. In 2005, the Compensation Committee engaged
an independent compensation consultant to update its review of
the Companys executive compensation program. The review
covered base salary and targeted compensation levels under the
Companys short-term incentive plan and long-term incentive
plan. The Compensation Committee analyzes the information and
makes annual adjustments based on performance and market
conditions. The policy of the Compensation Committee generally
is to establish base salary levels that approximate market
averages. Based on the consultants survey, adjustments
were made to certain executive officers base salary to
more closely approximate the market averages. |
|
|
Short-Term Incentive Plan: The short-term incentive plan
(STIP) is an annual incentive bonus plan in which
executive officers participate and is available to all full-time
employees of the Company and its subsidiaries. The target bonus
for an employee is the employees base salary at year-end
multiplied by the percentage factor assigned to the
employees salary classification. Target percentage factors
range from 6 to 100 percent, with factors of
100 percent for the CEO and either 65 or 70 percent
for the other four top-paid executive officers. |
|
|
In the 2005 performance year, the Compensation Committee set
annual performance goals for the Company to include four
specific performance-based measures and one discretionary
component assigned by the committee. The performance measures,
which account for 50% of the formula, are discretionary cash
flow, proved reserve additions, production, and controllable
unit costs. These performance measures and the related targets
for discretionary cash flow, proved reserve additions,
production, and controllable unit costs were reviewed and
approved by the Compensation Committee. Discretionary cash flow
is composed of net income, adding back depreciation, depletion
and amortization and various other non-cash expense items. In
the early part of 2006, the Compensation Committee reviewed the
overall performance of the Company for fiscal year 2005 and
assigned appropriate achievement factors to these performance
measures and determined the discretionary component. Payout
under the plan based on the Companys 2005 performance
occurred in February 2006. |
|
|
Long-Term Incentive Plan: The long-term incentive plan
(LTIP) was approved by the Compensation Committee
and adopted by the Board of Directors on January 27, 2004.
The LTIP is designed to: (i) provide a comprehensive
long-term incentive program that is performance-driven and
rewards long-term business success; (ii) offer competitive
long-term incentive compensation opportunities to key Company
employees; (iii) provide motivation to maximize long-term
stockholder value creation; (iv) reward outstanding
achievement of those who can most directly affect the
Companys results and instill a sense of business
ownership; and (v) assist the Company in attracting and
retaining high quality talent. The LTIP, which has an effective
date of January 1, 2004, provides for awards of stock
options, restricted stock and performance units. The stock
options and restricted stock are issued under the Companys
1992 Stock Option and Restricted Stock Plan (the 1992
Plan), which was approved by the stockholders in 1992 and
amended in 1997, 2000, 2002, 2003 and 2005. The 1992 Plan
permits the use of several different types of stock-based grants
or awards: nonqualified or incentive stock options with or
without stock appreciation rights, and restricted stock. Option
grants represent the right to purchase shares of common stock
over a period of up to ten years at fair market value on the
date of grant and upon such terms and conditions, consistent
with the provisions of the 1992 Plan, as are specified by the
Compensation Committee at the time of grant. Restricted stock
may be awarded by the Compensation Committee subject to such
terms and conditions as may be specified by the committee.
Restricted stock awarded under the LTIP will generally vest
after three years, provided that certain performance criteria |
17
|
|
|
are achieved during the performance period. Performance units
will be paid in cash based on the attainment of specific
predetermined multi-year performance objectives. For 2006, these
objectives are debt-adjusted reserves and production per share,
and total stockholder return relative to a predetermined peer
group. Generally, each performance period is three years. Prior
to the beginning of each period, performance objectives and
target awards are established by the Compensation Committee and
performance units are issued to participants. At the end of each
performance period, cash payouts are determined based on the
achievement of the objectives. Stock options, restricted stock
and performance units were awarded under the LTIP in February
2006, covering a performance period of January 1, 2006 to
December 31, 2008. |
|
|
During 2005, the Compensation Committee approved and the Company
awarded special non-LTIP compensation under the 1992 Plan,
including (i) awards of stock options and restricted stock
to Mr. Davidson on May 16, 2005 upon completion of the
Companys merger with Patina Oil & Gas
Corporation, (ii) awards of stock options and restricted
stock to executive officers on August 1, 2005 based on
independent compensation consultant data reflecting escalating
market compensation conditions, and (iii) awards of stock
options and restricted stock to Mr. Tong on January 3,
2005 as an inducement to his employment with the Company. Also
as an inducement to his employment with the Company,
Mr. Tong was awarded non-LTIP performance units on
January 3, 2005. The Compensation Committee may approve
additional non-LTIP awards in subsequent years under these and
other circumstances. |
2005 Compensation of CEO
Davidson Total Salary, STIP Bonus and LTIP and Other
Awards. After assessing the Companys overall
performance last year on the basis of the criteria described
above, for 2005 the Compensation Committee authorized for
Mr. Davidson (1) a total salary of $852,232,
(2) a bonus under the Companys STIP of $1,202,500
which was paid in February 2006 based on the Companys 2005
performance, (3) awards under the Companys LTIP of
58,852 stock options, 12,000 shares of restricted stock and
720,000 performance units, and (4) non-LTIP awards under
the 1992 Plan of 21,550 stock options and 8,700 shares
of restricted stock on May 16, 2005 upon completion of the
Patina merger and 12,000 stock options and
6,000 shares of restricted stock on August 1, 2005
based on independent compensation consultant data reflecting
escalating market conditions.
Change of Control Agreements
Davidson Change of Control Agreement. The Companys
change of control agreement with Mr. Davidson includes
provisions regarding the severance package that
Mr. Davidson may be entitled to if he is terminated within
24 months after a change of control of the Company. A
change of control for purposes of Mr. Davidsons
agreement will be deemed to have occurred if any of the
following conditions occur:
|
|
|
|
|
individuals who constituted the Board of Directors at the time
of Mr. Davidsons employment (the Incumbent
Board) cease to constitute at least 51% of the Board,
provided that any person whose election was approved by a vote
of at least a majority of the directors of the Incumbent Board
will be considered a member of the Incumbent Board; or |
|
|
|
the stockholders of the Company approve a reorganization, merger
or consolidation whereby the persons who were stockholders
immediately prior to the reorganization, merger or consolidation
do not immediately thereafter own at least 51% of the voting
shares of the new entity; or |
|
|
|
the stockholders of the Company approve a liquidation or
dissolution of the Company or a sale of all or substantially all
of the Companys assets to a non-related party; or |
|
|
|
a new person or entity becomes the owner of at least 25% of the
outstanding common stock or voting power in the Company. |
If the Company terminates Mr. Davidson for cause,
incapacity due to physical or mental illness, or death, the
Company has no further obligation to Mr. Davidson. A
termination for cause, upon the occurrence of
18
certain actions or circumstances enumerated in the change of
control agreement, may only be made by the affirmative vote of a
majority of the members of the Board of Directors.
If the Company terminates Mr. Davidson for any other reason
within 24 months after a change of control of the Company,
then the Company will pay or provide the following to
Mr. Davidson:
|
|
|
|
|
all unpaid salary, expenses, compensation and benefits; |
|
|
|
a lump sum of 2.99 times his annual cash compensation (made up
of annual salary and bonus); |
|
|
|
an amount equal to his pro-rata target bonus for the
then-current year; |
|
|
|
life, disability, medical and dental insurance benefits, upon
his written request, for 36 months or such shorter period
until Mr. Davidson obtains substantially equivalent
coverage from a subsequent employer; |
|
|
|
the continuation of the vesting of his Company stock
options; and |
|
|
|
reimbursement for reasonable fees up to $15,000 for
out-placement employment services. |
The above amounts will have a
gross-up payment
applied to them to offset fully the effect of any federal excise
tax.
Change of Control Agreements for Other Officers. As of
the date of this proxy statement, each executive officer of the
Company has a change of control agreement similar to
Mr. Davidsons as described above. These change of
control agreements generally incorporate the same terms and
conditions as Mr. Davidsons agreement, except a
different multiplier is used in the executive officers
agreements. This multiplier affects two provisions of the
agreement: (i) the lump sum payment that will be made upon
termination and (ii) the provision of insurance benefits.
For example, the multiplier in Mr. Davidsons
agreement is 2.99, so he will receive a lump sum of 2.99 times
his annual cash compensation and up to 36 months of
benefits (2.99 times 12 months) if he is terminated under
certain change of control circumstances that are described
above. The multiplier for the executive officers (other than
Mr. Davidson) is 2.5. Thus, each executive officers
lump sum payment is 2.5 times his or her annual cash
compensation and his or her insurance benefits may extend for up
to 30 months.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code contains
provisions that limit the tax deductibility of executive
compensation in excess of $1 million per person per year,
subject to certain exceptions. The general policy of the Company
is to design its compensation programs to preserve the tax
deductibility of compensation paid to its executive officers and
other members of management. However, the Compensation Committee
could determine, after taking into consideration the burdens of
compliance with Section 162(m) and other relevant facts and
circumstances, to pay compensation that is not fully deductible
if the committee believes the payments are in the Companys
best interest. In 1997, the stockholders of the Company approved
the amended and restated 1992 Plan, allowing compensation paid
thereunder in the form of stock options and stock appreciation
rights to qualify as performance-based compensation
for purposes of Section 162(m). In addition, in 2004 the
stockholders of the Company approved the material terms of the
performance goals applicable to future grants of restricted
stock and performance units under the LTIP for the purpose of
qualifying payments made pursuant to those grants as
performance-based compensation for the purposes of
Section 162(m).
19
Summary
The members of the Compensation Committee believe that linking
executive compensation to corporate performance results in a
better alignment of compensation with corporate goals and
stockholder interests. As performance goals are met or exceeded,
resulting in increased value to stockholders, executive officers
are rewarded commensurately. The Compensation Committee believes
that compensation levels during 2005 adequately reflect the
compensation goals and policies of the Company.
March 23, 2006
|
|
|
Compensation, Benefits and |
|
Stock Option Committee |
|
|
Kirby L. Hedrick, Chair |
|
Edward F. Cox |
|
Bruce A. Smith |
20
The following Summary Compensation Table,
Option Grants in 2005 table, Aggregated Option
Exercises in 2005 and 12/31/05 Option Values table,
Long Term Incentive Plan Grants in 2005 table,
Pension Plan Table, and Performance
Graph are attachments to this Report of the Compensation,
Benefits and Stock Option Committee on Executive Compensation.
The following table sets forth certain summary information
concerning the compensation awarded to, earned by or paid to the
Chief Executive Officer of the Company and each of the four
most-highly compensated executive officers of the Company other
than the Chief Executive Officer (collectively, the named
executive officers) for the years indicated. Stock options
and restricted stock represent shares as adjusted to reflect the
two-for-one split of the Companys common stock on
September 14, 2005.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Compensation |
|
Long Term Compensation |
|
|
|
|
|
|
|
|
|
Other |
|
Shares |
|
Shares of |
|
Performance |
|
All Other |
Name and |
|
|
|
Annual |
|
Underlying Stock |
|
Restricted |
|
Unit |
|
Compensation |
Principal Position |
|
Year |
|
Salary($) |
|
Bonus($) |
|
Compensation($) |
|
Options(1) |
|
Stock(2) |
|
Payouts |
|
($) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles D. Davidson
|
|
|
2005 |
|
|
|
852,232 |
|
|
|
1,202,500 |
|
|
|
4,100 |
|
|
|
92,402 |
(4) |
|
|
26,700 |
(4) |
|
|
0 |
|
|
|
355,238 |
|
|
President and Chief |
|
|
2004 |
|
|
|
741,667 |
|
|
|
1,320,000 |
|
|
|
4,100 |
|
|
|
86,580 |
|
|
|
22,320 |
|
|
|
0 |
|
|
|
220,470 |
|
|
Executive Officer
|
|
|
2003 |
|
|
|
700,000 |
|
|
|
560,000 |
|
|
|
4,100 |
|
|
|
150,000 |
|
|
|
|
|
|
|
0 |
|
|
|
145,046 |
|
|
Chris Tong
|
|
|
2005 |
|
|
|
345,973 |
|
|
|
399,965 |
|
|
|
136 |
|
|
|
73,580 |
|
|
|
23,176 |
|
|
|
0 |
|
|
|
122,042 |
|
|
Senior Vice President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susan M. Cunningham
|
|
|
2005 |
|
|
|
345,974 |
|
|
|
362,819 |
|
|
|
136 |
|
|
|
23,580 |
|
|
|
7,176 |
|
|
|
0 |
|
|
|
13,133 |
|
|
Senior Vice President |
|
|
2004 |
|
|
|
310,417 |
|
|
|
347,200 |
|
|
|
136 |
|
|
|
17,094 |
|
|
|
4,406 |
|
|
|
0 |
|
|
|
3,460 |
|
|
Exploration and
|
|
|
2003 |
|
|
|
300,000 |
|
|
|
148,000 |
|
|
|
136 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
198 |
|
|
Corporate Reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David L. Stover
|
|
|
2005 |
|
|
|
316,807 |
|
|
|
408,914 |
|
|
|
4,586 |
|
|
|
23,580 |
|
|
|
7,176 |
|
|
|
0 |
|
|
|
159,195 |
|
|
Senior Vice President |
|
|
2004 |
|
|
|
254,583 |
|
|
|
283,800 |
|
|
|
136 |
|
|
|
12,872 |
|
|
|
3,318 |
|
|
|
0 |
|
|
|
24,756 |
|
|
North America Division
|
|
|
2003 |
|
|
|
225,417 |
|
|
|
92,000 |
|
|
|
136 |
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
|
|
15,089 |
|
|
Alan R. Bullington
|
|
|
2005 |
|
|
|
293,474 |
|
|
|
352,028 |
|
|
|
5,349 |
|
|
|
20,580 |
|
|
|
5,176 |
|
|
|
0 |
|
|
|
68,279 |
|
|
Senior Vice President |
|
|
2004 |
|
|
|
248,469 |
|
|
|
238,900 |
|
|
|
5,350 |
|
|
|
12,872 |
|
|
|
3,318 |
|
|
|
0 |
|
|
|
40,380 |
|
|
International Division
|
|
|
2003 |
|
|
|
234,167 |
|
|
|
83,000 |
|
|
|
5,350 |
|
|
|
40,000 |
|
|
|
|
|
|
|
|
|
|
|
36,201 |
|
|
|
(1) |
Options represent the right to purchase shares of common stock
at a fixed price per share equal to fair market value on the
date of grant. Options will vest ratably over three years in
equal installments (33.33%) on the first, second and third
anniversaries of the date of grant. The vesting of the options
will accelerate in the event of a change in control of the
Company. Vesting of these options is not contingent on any
performance criteria, although none of the options may be
exercised before the first anniversary (absent a change in
control of the Company) or after the tenth anniversary of the
date of grant. |
|
(2) |
Consists of restricted shares of the Companys common stock
issued pursuant to the 1992 Plan. Vesting of the following
number of restricted shares at the end of the three-year
restricted period ending February 1, 2008 is dependent upon
the Companys achievement of total stockholder return that
meets or exceeds the comparable stockholder return of at least
25% of certain identified peer group companies:
Mr. Davidson 12,000; Mr. Tong
3,176; Ms. Cunningham 3,176;
Mr. Stover 3,176; and
Mr. Bullington 3,176. The vesting of the
remaining shares is not subject to performance criteria, and
will vest over a time period ranging between 30 to
36 months from the date of grant. In addition, the lapse of
restrictions on restricted shares will accelerate in the event
of a change in control of the Company. The grantee has the right
to receive dividends or distributions on the shares of
restricted stock, although such dividends or distributions are
subject to the same restrictions as the shares of restricted
stock. |
|
(3) |
Consists of (a) contributions by the Company to the Noble
Energy Thrift & Profit Sharing Plan,
(b) contributions by the Company to the Companys
nonqualified deferred compensation plan (including interest),
(c) taxable value of Company provided term life insurance
and (d) project and/or sign-on |
21
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|
|
bonuses; in each case as follows for the year ended
December 31, 2005 (with the amounts attributable to each
category for each respective named executive officer being
shown): Mr. Davidson (a)$12,600, (b)$342,638,
(c)$0, (d)$0; Mr. Tong (a)$10,290, (b)$6,240,
(c)$512, (d)105,000; Ms. Cunningham (a)$12,600,
(b)$0, (c)$533, (d)$0; Mr. Stover (a)$12,600,
(b)$36,115, (c)$480, (d)$110,000; and
Mr. Bullington (a)$12,600, (b)$45,007, (c)$672,
(d)$10,000. |
|
|
(4) |
Includes 21,550 stock options and 8,700 shares of
restricted stock awarded to Mr. Davidson on May 16,
2005 upon completion of the Companys merger transaction
with Patina. |
The following table sets forth certain information with respect
to options to purchase common stock granted during the year
ended December 31, 2005 to each of the named executive
officers.
Option Grants in 2005
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants |
|
|
|
|
|
|
Potential Realizable Value |
|
|
|
|
Number of |
|
% of Total |
|
|
|
at Assumed Annual Rates |
|
|
|
|
Shares |
|
Options |
|
Exercise |
|
|
|
of Stock Price Appreciation |
|
|
|
|
Underlying |
|
Granted to |
|
or Base |
|
|
|
for Option Term |
|
|
|
|
Options |
|
Employees |
|
Price |
|
Expiration |
|
|
Name |
|
Grant Date |
|
Granted(1) |
|
in 2005 |
|
($/sh) |
|
Date |
|
5%($)(2) |
|
10%($)(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles D. Davidson
|
|
|
Feb. 1 |
|
|
|
58,852 |
|
|
|
|
|
|
|
29.8700 |
|
|
|
2/1/15 |
|
|
|
1,105,535 |
|
|
|
2,801,649 |
|
|
|
|
May 16 |
|
|
|
21,550 |
(4) |
|
|
|
|
|
|
32.7925 |
|
|
|
5/16/15 |
|
|
|
444,436 |
|
|
|
1,126,257 |
|
|
|
|
Aug. 1 |
|
|
|
12,000 |
|
|
|
|
|
|
|
41.4650 |
|
|
|
8/1/15 |
|
|
|
312,924 |
|
|
|
793,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,402 |
|
|
|
3.26 |
% |
|
|
|
|
|
|
|
|
|
|
1,862,895 |
|
|
|
4,720,926 |
|
|
Chris Tong
|
|
|
Jan. 3 |
|
|
|
50,000 |
|
|
|
|
|
|
|
29.8800 |
|
|
|
1/3/15 |
|
|
|
939,550 |
|
|
|
2,381,050 |
|
|
|
|
Feb. 1 |
|
|
|
15,580 |
|
|
|
|
|
|
|
29.8700 |
|
|
|
2/1/15 |
|
|
|
292,670 |
|
|
|
741,686 |
|
|
|
|
Aug. 1 |
|
|
|
8,000 |
|
|
|
|
|
|
|
41.4650 |
|
|
|
8/1/15 |
|
|
|
208,616 |
|
|
|
528,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,580 |
|
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
1,440,836 |
|
|
|
3,651,416 |
|
|
Susan M. Cunningham
|
|
|
Feb. 1 |
|
|
|
15,580 |
|
|
|
|
|
|
|
29.8700 |
|
|
|
2/1/15 |
|
|
|
292,670 |
|
|
|
741,686 |
|
|
|
|
Aug. 1 |
|
|
|
8,000 |
|
|
|
|
|
|
|
41.4650 |
|
|
|
8/1/15 |
|
|
|
208,616 |
|
|
|
528,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,580 |
|
|
|
0.83 |
% |
|
|
|
|
|
|
|
|
|
|
501,286 |
|
|
|
1,270,366 |
|
|
David L. Stover
|
|
|
Feb. 1 |
|
|
|
15,580 |
|
|
|
|
|
|
|
29.8700 |
|
|
|
2/1/15 |
|
|
|
292,670 |
|
|
|
741,686 |
|
|
|
|
Aug. 1 |
|
|
|
8,000 |
|
|
|
|
|
|
|
41.4650 |
|
|
|
8/1/15 |
|
|
|
208,616 |
|
|
|
528,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,580 |
|
|
|
0.83 |
% |
|
|
|
|
|
|
|
|
|
|
501,286 |
|
|
|
1,270,366 |
|
|
Alan R. Bullington
|
|
|
Feb. 1 |
|
|
|
15,580 |
|
|
|
|
|
|
|
29.8700 |
|
|
|
2/1/15 |
|
|
|
292,670 |
|
|
|
741,686 |
|
|
|
|
Aug. 1 |
|
|
|
5,000 |
|
|
|
|
|
|
|
41.4650 |
|
|
|
8/1/15 |
|
|
|
130,385 |
|
|
|
330,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,580 |
|
|
|
0.73 |
% |
|
|
|
|
|
|
|
|
|
|
423,055 |
|
|
|
1,072,111 |
|
|
|
(1) |
Options represent the right to purchase shares of common stock
at the price per share (equal to fair market value on the date
of grant) indicated in the table. Options will vest ratably over
three years in equal installments (33.33%) on the first, second
and third anniversaries of the date of grant. |
|
(2) |
Reflects an assumed appreciated market price per share of common
stock as follows: |
|
|
|
|
|
|
|
Appreciated |
Grant Date |
|
Market Price |
|
|
|
January 3
|
|
$ |
48.671 |
|
February 1
|
|
$ |
48.655 |
|
May 16
|
|
$ |
53.416 |
|
August 1
|
|
$ |
67.542 |
|
22
|
|
(3) |
Reflects an assumed appreciated market price per share of common
stock as follows: |
|
|
|
|
|
|
|
Appreciated |
Grant Date |
|
Market Price |
|
|
|
January 3
|
|
$ |
77.501 |
|
February 1
|
|
$ |
77.475 |
|
May 16
|
|
$ |
85.055 |
|
August 1
|
|
$ |
107.550 |
|
|
|
(4) |
Options granted to Mr. Davidson on May 16, 2005 upon
completion of the Companys merger transaction with Patina. |
The following table sets forth certain information with respect
to the exercise of options to purchase common stock during the
year ended December 31, 2005, and the unexercised options
held at December 31, 2005 and the value thereof, by each of
the named executive officers.
Aggregated Option Exercises in 2005
and 12/31/05 Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
|
|
|
|
|
|
Underlying Unexercised |
|
Value of Unexercised |
|
|
|
|
|
|
Options at December 31, |
|
In-the-Money Options at |
|
|
Shares |
|
|
|
2005 (number of shares) |
|
December 31, 2005 ($) |
|
|
Acquired |
|
Value |
|
|
|
|
Name |
|
on Exercise |
|
Realized($) |
|
Exercisable |
|
Unexercisable |
|
Exercisable |
|
Unexercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles D. Davidson
|
|
|
|
|
|
|
|
|
|
|
562,860 |
|
|
|
200,122 |
|
|
|
12,043,883 |
|
|
|
2,913,893 |
|
Chris Tong
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
73,580 |
|
|
|
0 |
|
|
|
671,695 |
|
Susan M. Cunningham
|
|
|
|
|
|
|
|
|
|
|
133,031 |
|
|
|
51,643 |
|
|
|
2,905,532 |
|
|
|
737,507 |
|
David L. Stover
|
|
|
|
|
|
|
|
|
|
|
45,957 |
|
|
|
45,495 |
|
|
|
976,353 |
|
|
|
612,365 |
|
Alan R. Bullington
|
|
|
|
|
|
|
|
|
|
|
94,957 |
|
|
|
42,495 |
|
|
|
2,073,306 |
|
|
|
612,365 |
|
23
The following table sets forth certain information with respect
to performance units granted during the year ended
December 31, 2005 to each of the named executive officers.
Performance units will be paid in cash based upon the
Companys achievement of specific predetermined multi-year
performance targets established by the Compensation Committee.
At the end of the performance period ending December 31,
2007, cash payouts will be determined based on the achievement
of these targets and paid in cash in the third quarter of 2008.
The amount per unit is dependent upon: (a) debt-adjusted
compound annual growth rates in reserves per share and
production per share, in each case relative to a predetermined
peer group and calculated over a three-year measurement period
commencing on January 1, 2005 and ending on
December 31, 2007, and (b) total stockholder return
relative to the same peer group over the same three-year
measurement period.
Long Term Incentive Plan Grants in 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Total |
|
|
|
Estimated Payout at Maturity |
|
|
Number of |
|
Performance |
|
|
|
|
|
|
Performance |
|
Units Granted |
|
|
|
|
|
Target |
|
Maximum |
|
|
Units |
|
to Employees |
|
|
|
Minimum |
|
Payout @ |
|
Payout @ |
Name |
|
Granted |
|
in 2005 |
|
Performance Period |
|
Payout |
|
$1 per Unit |
|
$2 per Unit |
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles D. Davidson
|
|
|
720,000 |
|
|
|
7.94 |
% |
|
|
Jan. 1, 2005 Dec. 31, 2007 |
|
|
$ |
0 |
|
|
$ |
720,000 |
|
|
$ |
1,440,000 |
|
Susan M. Cunningham
|
|
|
190,600 |
|
|
|
2.1 |
% |
|
|
Jan. 1, 2005 Dec. 31, 2007 |
|
|
$ |
0 |
|
|
$ |
190,600 |
|
|
$ |
381,200 |
|
Chris Tong(1)
|
|
|
190,600 |
|
|
|
2.1 |
% |
|
|
Jan. 1, 2005 Dec. 31, 2007 |
|
|
$ |
0 |
|
|
$ |
190,600 |
|
|
$ |
381,200 |
|
David L. Stover
|
|
|
190,600 |
|
|
|
2.1 |
% |
|
|
Jan. 1, 2005 Dec. 31, 2007 |
|
|
$ |
0 |
|
|
$ |
190,600 |
|
|
$ |
381,200 |
|
Alan R. Bullington
|
|
|
190,600 |
|
|
|
2.1 |
% |
|
|
Jan. 1, 2005 Dec. 31, 2007 |
|
|
$ |
0 |
|
|
$ |
190,600 |
|
|
$ |
381,200 |
|
|
|
(1) |
Mr. Tong also received 159,000 Performance Units for the
performance period January 1, 2004
December 31, 2006 with a minimum payout of $0, target
payout of $159,000 and a maximum payout of $318,000. |
The defined benefit plans of the Company that cover its
executive officers provide the benefits shown below. The
estimates assume that benefits are received in the form of a
ten-year certain and life annuity.
Pension Plan Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Annual Benefits Upon Retirement at Age 65 After |
|
|
Completion of the Following Years of Service |
60 Month Average |
|
|
Annual Compensation |
|
15 |
|
20 |
|
25 |
|
30 |
|
35 |
|
|
|
|
|
|
|
|
|
|
|
$ 100,000
|
|
$ |
30,000 |
|
|
$ |
40,000 |
|
|
$ |
40,000 |
|
|
$ |
45,196 |
|
|
$ |
45,196 |
|
|
150,000
|
|
|
45,000 |
|
|
|
60,000 |
|
|
|
60,000 |
|
|
|
71,446 |
|
|
|
71,446 |
|
|
200,000
|
|
|
60,000 |
|
|
|
80,000 |
|
|
|
81,413 |
|
|
|
97,696 |
|
|
|
97,696 |
|
|
300,000
|
|
|
90,000 |
|
|
|
120,000 |
|
|
|
125,163 |
|
|
|
150,196 |
|
|
|
150,196 |
|
|
400,000
|
|
|
120,000 |
|
|
|
160,000 |
|
|
|
168,913 |
|
|
|
202,696 |
|
|
|
202,696 |
|
|
600,000
|
|
|
180,000 |
|
|
|
240,000 |
|
|
|
256,413 |
|
|
|
307,696 |
|
|
|
307,696 |
|
|
800,000
|
|
|
240,000 |
|
|
|
320,000 |
|
|
|
343,913 |
|
|
|
412,696 |
|
|
|
412,696 |
|
|
1,000,000
|
|
|
300,000 |
|
|
|
400,000 |
|
|
|
431,413 |
|
|
|
517,696 |
|
|
|
517,696 |
|
|
1,300,000
|
|
|
390,000 |
|
|
|
520,000 |
|
|
|
562,663 |
|
|
|
675,196 |
|
|
|
675,196 |
|
|
1,400,000
|
|
|
420,000 |
|
|
|
560,000 |
|
|
|
606,413 |
|
|
|
727,696 |
|
|
|
727,696 |
|
|
1,500,000
|
|
|
450,000 |
|
|
|
600,000 |
|
|
|
650,163 |
|
|
|
780,196 |
|
|
|
780,196 |
|
Upon vesting, the amount of retirement benefit depends on an
employees final average monthly compensation, age and the
number of years of credited service (maximum of 30). Final
average monthly compensation is defined generally to mean the
participants average monthly rate of compensation from the
Company for the 60 consecutive months prior to retirement that
give the highest average monthly rate of compensation for the
participant. Compensation covered by the defined benefit plans
is defined (with certain exceptions) to mean the compensation
actually paid to a participant as reported on the
participants federal
24
income tax withholding statement for the applicable calendar
year. Accordingly, the amounts reported in the Summary
Compensation Table included elsewhere in this proxy statement
under the section Annual Compensation approximate
covered compensation for 2005. The amount of benefit shown in
the above table is not subject to any deductions for social
security or any other offset amounts.
Under the Companys qualified defined benefit plan and
applicable Internal Revenue Code provisions, as of
January 1, 2005, the amount of compensation that can be
taken into account under the Companys qualified defined
benefit plan was $210,000 and the maximum annual benefit
increased to $170,000. The benefits that accrue in excess of
these limitations are paid pursuant to the Companys
nonqualified defined benefit plan and are subject to social
security taxes.
As of December 31, 2005, the named executive officers had
the following approximate number of years of credited service
for retirement purposes: Mr. Davidson 5;
Mr. Tong 1; Ms. Cunningham 4;
and Mr. Stover 3; and
Mr. Bullington 15.
Under the Companys nonqualified Deferred Compensation
Plan, the named executive officers are eligible to defer
portions of the salary and bonus reflected on the Summary
Compensation Table above, and to receive certain matching
contributions that would have been made to the Companys
qualified 401(k) plan if the plan had not been subject to
Internal Revenue Code compensation and contribution limitations.
The matching contributions and interest earnings credited to the
Deferred Compensation Plan accounts of the named executive
officers are reflected in the All Other Compensation
column of the Summary Compensation Table above.
25
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG NOBLE ENERGY, INC., THE S&P 500 INDEX
AND A PEER GROUP
The following graph sets forth the cumulative total stockholder
return for the Companys common stock, the S&P 500
Index, and a Company peer group, for the years indicated as
prescribed by the SECs rules.
|
|
* |
$100 invested on 12/31/00 in stock or index-including
reinvestment of dividends. Fiscal year ending December 31. |
Copyright
©
2006, Standard & Poors, a division of The McGraw-Hill
Companies, Inc. All rights reserved.
www.researchdatagroup.com/S&P.htm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Total Return(1) |
|
|
|
|
|
|
|
|
|
12/00 |
|
|
12/01 |
|
|
12/02 |
|
|
12/03 |
|
|
12/04 |
|
|
12/05 |
|
|
|
|
|
|
Noble Energy, Inc.
|
|
|
|
100.00 |
|
|
|
|
77.03 |
|
|
|
|
82.35 |
|
|
|
|
97.90 |
|
|
|
|
136.41 |
|
|
|
|
179.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S&P 500 Index
|
|
|
|
100.00 |
|
|
|
|
88.12 |
|
|
|
|
68.64 |
|
|
|
|
88.33 |
|
|
|
|
97.94 |
|
|
|
|
102.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peer Group(2)
|
|
|
|
100.00 |
|
|
|
|
79.55 |
|
|
|
|
82.39 |
|
|
|
|
105.54 |
|
|
|
|
141.97 |
|
|
|
|
229.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Total return assuming reinvestment of dividends. Assumes $100
invested on December 31, 2000 in common stock, the S&P
500 Index and the Peer Group of Companies. |
|
(2) |
Composed of the following companies: Anadarko Petroleum Corp.,
Apache Corp., Burlington Resources Inc., Chesapeake Energy
Corp., Devon Energy Corp., EOG Resources Inc., Forest Oil Corp.,
Houston Exploration Company, Kerr-McGee Corp., Murphy Oil Corp.,
Newfield Exploration Company, NOBLE ENERGY, INC., Pioneer
Natural Resources Company, Pogo Producing Company, Stone Energy
Corp., Vintage Petroleum Inc., and XTO Energy Inc. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Exchange Act requires directors and
officers of the Company, and persons who beneficially own more
than 10 percent of the Companys common stock, to file
with the SEC initial reports of ownership and reports of changes
in ownership of the common stock. Directors, officers and more
than 10 percent stockholders are required by SEC
regulations to furnish the Company with copies of all
Section 16(a) forms they file.
26
To the Companys knowledge, based solely on a review of the
copies of the reports furnished to the Company and written
representations that no other reports were required, all
Section 16(a) filing requirements applicable to its
directors, officers and more than 10 percent beneficial
owners were complied with during the year ended
December 31, 2005.
CERTAIN TRANSACTIONS
In the ordinary course of its business, the Company purchases
products or services from, or engages in other transactions
with, various third parties. Occasionally, these transactions
may involve entities that are affiliated with one or more
members of the Board of Directors. When they occur, these
transactions are conducted in the ordinary course and on an
arms-length basis.
During 2005, the Company paid approximately $374,194 to Thomas
J. Edelman, a director of the Company, pursuant to the terms of
a consulting agreement with an effective date of May 16,
2005 between Mr. Edelman and the Company. The Company
entered into the consulting agreement to retain the services of
Mr. Edelman as an independent contractor of, and consultant
for, the Company for a period of twelve months from the
effective date of the agreement. The consulting agreement
requires Mr. Edelman to provide the Company with advice on
specific matters, with a principal focus on the integration of
the operations of Patina Oil & Gas Corporation into the
operations of the Company. The Company will pay Mr. Edelman
the sum of $50,000 monthly and provide certain benefits to
Mr. Edelman throughout the term of the consulting agreement.
During 2005, the Company received approximately
$3.3 million from Tesoro Corporation, as consideration for
a single sale of crude oil production attributable to the
Companys non-operated interest in the El Tordillo field in
Argentina. The sale of the Companys crude oil to Tesoro
was arranged by the field operator, TecPetrol Sociedad Anonima,
in connection with a single arms-length fair market value
transaction by competitive bid covering all field production,
without active participation by the Company. Mr. Smith is
Chairman and Chief Executive Officer of Tesoro.
During 2005, the Company paid approximately $77,436 to The
Samuel Roberts Noble Foundation, Inc., principally relating to
reimbursement of expenses for the Companys use of aircraft
owned by the Foundation, and the Company received payments of
approximately $24,289 for the Foundations use of aircraft
owned by the Company. Michael A. Cawley is President and Chief
Executive Officer of the Foundation, and a trustee of the
Foundation.
27
REPORT OF THE
AUDIT COMMITTEE
To the Stockholders of
Noble Energy, Inc.:
The primary purpose of the Audit Committee of the Companys
Board of Directors is to: (1) assist the Board of Directors
in fulfilling its responsibility to oversee the integrity of the
Companys financial statements, the Companys
compliance with legal and regulatory requirements, the
independent auditors qualifications and independence, and
the performance of the Companys internal audit function
and independent auditor and (2) prepare a committee report
as required by the SEC to be included in the Companys
annual proxy statement. The Audit Committees function is
more fully described in its charter, which the Audit Committee
and the Board of Directors adopted on March 4, 2004 and
most recently amended on January 24, 2006 in connection
with the Audit Committees annual review of its charter. A
copy of the charter is available on the Companys website
at www.nobleenergyinc.com under the
Corporate Governance section and is also available
in print to any shareholder who requests it. The Audit Committee
held ten meetings during 2005, including regular meetings and
special meetings addressing earnings releases and related
matters.
The Board of Directors appointed William T. Van Kleef to the
Audit Committee effective December 5, 2005. Throughout 2005
and continuing to date, the Audit Committee has been comprised
entirely of independent directors, as defined and required by
current NYSE listing standards and Section 10A(m)(3) of the
Exchange Act of 1934, as amended, and as so determined by the
Companys Board of Directors. The Board of Directors has
also determined that Messrs. Smith and Van Kleef are each
an audit committee financial expert as that term is
defined in Item 401(h) of
Regulation S-K.
Review and Discussion
The Audit Committee has reviewed and discussed the
Companys audited financial statements with management. It
has also discussed with KPMG LLP, the Companys independent
auditor, the matters required to be discussed by Statement of
Auditing Standards No. 61 (Communication with Audit
Committees), as amended by SAS No. 90 (Audit Committee
Communications). Additionally, KPMG LLP has provided to the
Audit Committee the written disclosures required by Independence
Standards Board Standard No. 1 Independence Discussions
with Audit Committees, and the committee discussed the
auditors independence with management and the auditors.
The Audit Committee also has considered whether KPMG LLPs
rendering of non-audit services to the Company is compatible
with maintaining its independence. The Audit Committee has
concluded that the rendering of the non-audit services by KPMG
LLP has not impaired its independence.
Based on the Audit Committees discussions with management
and the independent auditor, and its review of the
representations of management and the report of KPMG LLP to the
Audit Committee, the Audit Committee recommended to the Board of
Directors the inclusion of the audited consolidated financial
statements in the Companys Annual Report on
Form 10-K for the
year ended December 31, 2005, as filed with the SEC.
March 23, 2006
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Audit Committee |
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Bruce A. Smith, Chair |
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Michael A. Cawley |
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Kirby L. Hedrick |
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William T. Van Kleef |
28
MATTERS RELATING TO THE INDEPENDENT AUDITOR
Accounting Fees and Services for Fiscal Years 2005 and
2004
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2005 |
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% |
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2004 |
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% |
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Audit Fees
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1,357,000 |
(1) |
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87.1 |
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1,518,000 |
(1) |
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82.0 |
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Audit Related Fees
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177,086 |
(2) |
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11.4 |
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175,150 |
(2) |
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9.5 |
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Tax
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24,362 |
(3) |
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1.5 |
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156,688 |
(3) |
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8.5 |
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Other
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0 |
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0 |
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|
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0 |
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|
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0 |
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|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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1,558,448 |
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100 |
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1,849,838 |
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100 |
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(1) |
The services rendered in 2004 and 2005 included the audit of the
Companys annual financial statements,
Form 10-K, and
review of the financial statements included in the
Companys
Forms 10-Q. In
addition, the services included the audit of the Companys
internal controls. |
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(2) |
Includes fees paid for statutory audit, retirement plan and
401(k) audit work, and various other reports for internal
compliance. |
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(3) |
Various tax consultations. |
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee pre-approves all audit and non-audit
services by an independent auditor prior to the receipt of such
services. The Audit Committee Chair has the authority to
pre-approve non-audit related services of up to $25,000 rendered
by the Companys independent auditor. Any pre-approval of
non-audit services by the Audit Committee Chair shall be
reported to the Audit Committee at its next scheduled meeting.
All audit-related services, tax services and other services for
2005 set forth in the table above were pre-approved by the Audit
Committee Chair or the Audit Committee, as provided above, which
in either case determined that such services would not impair
the independence of the auditor and are consistent with the
SECs rules on auditor independence.
29
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals intended to be brought before the annual
meeting of stockholders as an agenda item or to be included in
the Companys proxy statement relating to the 2006 annual
meeting of stockholders, which is currently scheduled to be held
on April 24, 2007, must be received by the Company at its
office in Houston, Texas, addressed to the Secretary of the
Company, no later than November 23, 2006.
The cost of solicitation of proxies will be borne by the
Company. Solicitation may be made by mail, personal interview,
telephone or telegraph by officers, agents or employees of the
Company, who will receive no additional compensation therefor.
To aid in the solicitation of proxies, the Company has employed
the firm of Georgeson & Co., Inc., which will receive a
fee of approximately $7,500 plus
out-of-pocket expenses.
The Company will bear the reasonable expenses incurred by banks,
brokerage firms, custodians, nominees and fiduciaries in
forwarding proxy material to beneficial owners.
The Board of Directors does not intend to present any other
matter at the meeting and knows of no other matters that will be
presented. However, if any other matter comes before the
meeting, the persons named in the enclosed proxy intend to vote
thereon in accordance with their best judgment.
Houston, Texas
March 23, 2006
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Chris Tong |
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Senior Vice President and |
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Chief Financial Officer |
30
(NOBLE ENERGY LOGO)
THERE ARE THREE WAYS TO VOTE YOUR PROXY
TELEPHONE VOTING
This method of voting is
available for residents of the
U.S. and Canada. On a touch
tone telephone, call TOLL
FREE 1-800-850-5356, 24 hours
a day, 7 days a week. Have this
proxy card ready, then follow the
prerecorded instructions. Your
vote will be confirmed and cast
as you have directed. Available
until 5:00 p.m. Eastern Time on
April 24, 2006.
INTERNET VOTING
Visit the Internet voting Web site
at http://proxy.georgeson.com.
Have this proxy card ready and
follow the instructions on your
screen. You will incur only your
usual Internet charges. Available
until 5:00 p.m. Eastern Time on
April 24, 2006.
VOTING BY MAIL
Simply mark, sign and date
your proxy card and return it
in the postage-paid envelope
to Georgeson Shareholder
Communications, Wall Street
Station, P.O. Box 1102, New
York, NY 10269-0667. If you
are voting by telephone or the
Internet, please do not mail
your proxy card.
CONTROL NUMBER
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
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x
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Please mark your votes as indicated
in this example. |
The
Companys Board of Directors recommends a vote FOR proposal 1,
with no
exceptions, and FOR proposal 2.
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1.
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Election of Directors
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FOR ALL
NOMINEES
WITH NO
EXCEPTIONS
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FOR ALL
NOMINEES WITH
EXCEPTIONS
NOTED
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WITHHOLD
AUTHORITY
FOR ALL
NOMINEES |
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Jeffrey L. Berenson, Michael A. Cawley,
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o
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o
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o |
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Edward F. Cox, Charles D. Davidson, |
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Thomas J. Edelman, Kirby L. Hedrick, |
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Bruce A. Smith and William T. Van Kleef |
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(Instruction: To withhold authority to vote for any
individual nominee, write that nominees name in the
space provided below.) |
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2.
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Proposal to ratify the appointment of KPMG LLP as the
Companys independent auditor.
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FOR
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AGAINST
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ABSTAIN |
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o
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o
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o |
The Companys Board of Directors recommends a vote AGAINST proposal 3.
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3.
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Stockholder proposal that the Board of
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FOR
o
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AGAINST
o
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ABSTAIN
o |
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Directors revise the Corporate Governance Guidelines of the
Company to establish a policy of separating the positions
of Chairman of the Board of Directors
and Chief Executive Officer so that the Chairman of the Board
of Directors will be an independent member of the Board,
except in explicitly spelled out extraordinary circumstances. |
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4. |
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In their discretion, the proxies are authorized to vote upon such
other business or matters as may properly come before the
meeting and any adjournment or postponement thereof. |
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I hereby revoke any proxy or proxies previously given to represent
or vote the shares of common stock of the Company that I am
entitled to vote, and I ratify and confirm all actions that the
proxies, their substitutes, or any of them, may lawfully take in
accordance with the terms of this proxy card. |
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Date
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2006 |
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Signature |
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Signature (if held jointly) |
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Please sign this proxy as your name(s) appears above. Joint
owners should both sign. If signed as attorney, executor, guardian
or in some other representative capacity, or as officer of a
corporation, please indicate your capacity or title. |
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Please complete, date and sign this proxy and return it
promptly in the enclosed envelope, which requires no postage
if mailed in the United States. |
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
NOBLE ENERGY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I have received the Notice of Annual Meeting of Stockholders to be held on April 25,
2006, and a Proxy
Statement furnished by the Board of Directors of Noble Energy, Inc. (the Company) for the
Meeting. I
appoint Charles D. Davidson and Chris Tong, and each of them, as proxies with power of substitution
in
each, to represent me and to vote all the shares of common stock of the Company that I am entitled
to
vote at the Annual Meeting on April 25, 2006 in the manner shown on this form as to the following
matters
and in their discretion on any other matters that come before the meeting.
THE PROXY HOLDERS CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD. IF THIS PROXY IS SIGNED AND RETURNED, IT WILL BE VOTED IN ACCORDANCE WITH
YOUR INSTRUCTIONS. YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES ON THE REVERSE SIDE, BUT IF YOU DO NOT SPECIFY HOW THE PROXY
SHOULD BE VOTED, IT WILL BE VOTED FOR PROPOSAL 1 (WITH NO EXCEPTIONS) AND 2, AND
AGAINST PROPOSAL 3.
(Continued and to be signed on the reverse side)