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Use these links to rapidly review the document TABLE OF CONTENTS
UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
SCHEDULE14A
(Rule14a-101)
ProxyStatementPursuanttoSection14(a)oftheSecuritiesExchangeActof1934(AmendmentNo.)
FiledbytheRegistrantý
FiledbyaPartyotherthantheRegistranto
Checktheappropriatebox:
o PreliminaryProxyStatement
o Confidential,forUseoftheCommissionOnly(aspermittedbyRule14a-6(e)(2))
ý DefinitiveProxyStatement
o DefinitiveAdditionalMaterials
o SolicitingMaterialunder§240.14a-12
WPXEnergy,Inc.
(NameofRegistrantasSpecifiedInItsCharter)
(NameofPerson(s)FilingProxyStatement,ifotherthantheRegistrant)
PaymentofFilingFee(Checktheappropriatebox):
ý Nofeerequired.
o FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11. (1) Titleofeachclassofsecuritiestowhichtransactionapplies:
(2) Aggregatenumberofsecuritiestowhichtransactionapplies:
(3) PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(setforththeamounton
whichthefilingfeeiscalculatedandstatehowitwasdetermined):
(4) Proposedmaximumaggregatevalueoftransaction:
(5) Totalfeepaid:
o Feepaidpreviouslywithpreliminarymaterials.
o CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule0-11(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaidpreviously.Identifythepreviousfilingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.
(1) AmountPreviouslyPaid:
(2) Form,ScheduleorRegistrationStatementNo.:
(3) FilingParty:
(4) DateFiled:
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3500OneWilliamsCenterTulsa,Oklahoma74172
April4,2017DearWPXEnergyStockholders:
Youarecordiallyinvitedtoattendthe2017AnnualMeetingofStockholdersofWPXEnergy,Inc.ThemeetingwillbeheldonThursday,May18,2017,intheSevilleIRoomoftheRenaissanceTulsaHotel&ConventionCenter,6808South107thEastAvenue,Tulsa,Oklahoma74133,at9:30a.m.,CentralDaylightTime.WelookforwardtogreetingpersonallyasmanyofourstockholdersaspossibleattheAnnualMeeting.
ThenoticeoftheAnnualMeetingandproxystatementthataccompanythisletterprovideinformationconcerningmatterstobeconsideredandacteduponattheAnnualMeeting.Ourproxystatementalsoincludesinformationaboutthemeetingitself,including:
• howtoobtainadmissiontothemeetingifyouplantoattend;and
• differentmethodsyoucanusetovotebyproxy,includingbyInternet,telephoneandmail.
AsastockholderofWPXEnergy,youplayanimportantroleinourcompanybyconsideringandtakingactiononthesematters.Weappreciatethetimeandattentionyouinvestinmakingthoughtfuldecisions.
WhilemostofourstockholdersareunlikelytobeabletoattendtheAnnualMeetinginperson,itisimportantthatyoursharesberepresentedandvotedatthemeeting.Weencourageyoutovoteyoursharesaspromptlyaspossible.
Thankyouforyourcontinuedinterestinourcompany.
Verytrulyyours,
RichardE.MuncriefChairman of the Board of Directors ,President and Chief Executive Officer
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WPXENERGY,INC.3500OneWilliamsCenterTulsa,Oklahoma74172
NOTICEOFANNUALMEETINGOFSTOCKHOLDERSMay18,2017
TothestockholdersofWPXEnergy,Inc.:
WPXEnergy,Inc.willholditsAnnualMeetingofStockholdersonMay18,2017at9:30a.m.CentralDaylightTimeintheSevilleIRoomoftheRenaissanceTulsaHotel&ConventionCenter,6808South107thEastAvenue,Tulsa,Oklahoma74133.DetailsfortheAnnualMeetingofStockholdersarebelow:
IMPORTANTNOTICEREGARDINGAVAILABILITYOFPROXYMATERIALSFORTHEANNUALMEETINGOFSTOCKHOLDERS
TOBEHELDONMAY18,2017:
TheNoticeofInternetAvailabilityofProxyMaterials,NoticeofAnnualMeeting,ProxyStatementandAnnualReportareavailableat
www.edocumentview.com/WPX
TIME 9:30a.m.,CentralDaylightTime,onThursday,May18,2017
PLACE SevilleIRoomoftheRenaissanceTulsaHotel&ConventionCenter,6808South107thEastAvenue,Tulsa,Oklahoma74133
ITEMSOFBUSINESS 1.Toelectelevendirectornomineesidentifiedinthisproxystatement,onthetermsandconditionsspecified;
2.Toconductanadvisoryvoteonexecutivecompensation;
3.ToratifytheappointmentofErnst&YoungLLPasourindependentauditorsfor2017;and
4.TotransactsuchotherbusinessasmayproperlycomebeforetheAnnualMeetingoranyadjournmentofthemeeting.
RECORDDATE YoucanvoteandattendtheAnnualMeetingifyouwereastockholderofrecordatthecloseofbusinessonMarch27,2017.
ANNUALREPORT Our2016annualreport,whichincludesacopyofourAnnualReportonForm10-K,accompaniesthisproxystatement.
PROXYVOTING ItisimportantthatyoursharesberepresentedandvotedattheAnnualMeeting.WeencourageyoutovotebyInternetortelephone,orcomplete,signandreturnyourproxypriortothemeetingevenifyouplantoattendtheAnnualMeeting.Ifyoulaterchoosetorevokeyourproxy,youmaydosoatanytimebeforeitisexercisedattheAnnualMeetingbyfollowingtheproceduresdescribedunderQuestion12ofthe"QuestionsandAnswersabouttheAnnualMeetingandVoting"sectionintheattachedproxystatement.
ByOrderoftheBoardofDirectors,
StephenE.BrilzVice President and Corporate Secretary
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TABLEOFCONTENTS
i
SUMMARY 1QUESTIONSANDANSWERSABOUTTHEANNUALMEETINGANDVOTING 4PROPOSAL1—ELECTIONOFDIRECTORS 10
Director Nomination Process 10Nominees 13
CORPORATEGOVERNANCE 18Overview 18Corporate Governance Practices 18BoardStructure 18BoardandBoardCommitteesCompositionandPerformance 19GuidelinesandBoardPolicies 19IndependentAuditors 20CorporateGovernanceGuidelines 20CodeofBusinessConduct 20DirectorIndependence 20BoardLeadershipStructure 21RiskOversight 22
Executive Officers 22Board Meetings and Annual Meeting Attendance 24Board Committees 25AuditCommittee 25CompensationCommittee 25NominatingandGovernanceCommittee 25CommunicationswiththeBoardofDirectors 26
EXECUTIVECOMPENSATION 27Executive Summary 27Compensation Discussion and Analysis 28CompensationPhilosophy 29DeterminationofTotalCompensation 29
Role of our Compensation Committee and Board of Directors 29Consideration of 2016 Stockholder Advisory Vote to Approve 2015 Executive Compensation 30Role of the Compensation Committee's Independent Compensation Consultant 30Role of Management and Executive Officers 30Competitive Positioning 30Use of Tally Sheets and Wealth Accumulation Analysis 31
ElementsofourCompensationProgram 32Base Salary 33Annual Cash Incentive 34Long-Term Incentives 38Performance-Based Restricted Stock Units 40Vesting of 2014 Performance-Based RSUs 41Time-Based Restricted Stock Awards 42Benefits and Limited Perquisites 43
OtherCompensationPractices 43Stock Ownership Guidelines 43Consideration of Risk in Setting Executive Compensation 44Recoupment Policy 45Anti-Hedging and Anti-Pledging Policies 45Employment Agreements 45
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Termination and Severance Arrangements 45Change-in-Control 46Accounting and Tax Treatment 47
2016SummaryCompensationTable 482016Performance-BasedRSUMaximumPotential 482016OutstandingEquityAwards 492016GrantsofPlan-BasedAwards 502016WPXOptionExercisesandStockVested 512016NonqualifiedDeferredCompensation 51Change-in-ControlAgreements 51TerminationScenarios 54CompensationCommitteeReport 55DirectorCompensation 55DirectorCompensationTable 56
EQUITYCOMPENSATIONPLANINFORMATION 57PROPOSAL2—ADVISORYVOTEONEXECUTIVECOMPENSATION 58CERTAINRELATIONSHIPSANDTRANSACTIONS 59COMPENSATIONCOMMITTEEINTERLOCKSANDINSIDERPARTICIPATION 59AUDITCOMMITTEEREPORT 60INDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM 62PROPOSAL3—RATIFICATIONOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM 63SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT 63SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE 66OTHERMATTERSATMEETING 66
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SUMMARY
Thissummaryhighlightsinformationcontainedelsewhereinthisproxystatement.Weencourageyoutoreviewtheentireproxystatement.
WearetakingadvantageofrulesoftheSecuritiesandExchangeCommission,or"SEC,"thatallowustodeliverproxymaterialstoourstockholdersontheInternet.Undertheserules,wearesendingmostofourstockholdersabriefnoticeregardingtheInternetavailabilityofproxymaterialsinsteadofafullsetofproxymaterials.Ifyoureceivethisbriefnotice,or"Notice,"youwillnotreceiveprintedcopiesoftheproxymaterialsunlessyouspecificallyrequestthem.Instead,thisNoticetellsyouhowtoaccessandreviewontheInternetalloftheimportantinformationcontainedintheproxymaterials,includingourannualreporttostockholders.ThisNoticealsotellsyouhowtosubmityourproxycardontheInternetandhowtorequesttoreceiveaprintedcopyoftheproxymaterials.
Weexpecttomail,orprovidenoticeandelectronicdeliveryof,thisproxystatement,ourannualreportandaccompanyingproxycardtostockholdersbeginningonoraboutApril4,2017.Unlessthecontextotherwiserequires,theterms"WPXEnergy,""WPX,"the"Company,""us,""we,"and"our"includeWPXEnergy,Inc.anditsconsolidatedsubsidiaries.
WPXEnergy,Inc.
Weareanindependentoilandnaturalgasexplorationandproductioncompanyengagedintheexploitationanddevelopmentoflong-lifeunconventionalproperties.Our2016AnnualReport,whichaccompaniesthisproxystatement,providesacomprehensivedescriptionofourbusiness.
CorporateGovernance
WPXEnergyiscommittedtomeetinghighstandardsofethicalbehavior,corporategovernanceandbusinessconductineverythingwedo.Consistentwiththiscommitment,wehaveadoptedthefollowingpractices:
• Board Structure and Composition. Alldirectors,otherthanourChairmanandChiefExecutiveOfficer,areindependent.TheindependentdirectorshavedesignatedaLeadDirectorwhoischargedwiththeresponsibilitiessetforthintheLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com.
• Stock Ownership Guidelines. Ourdirectorsandexecutiveofficersaresubjecttostockownershipguidelinesthataligntheirinterestswiththoseofourstockholders,andalldirectorsandofficersareincompliancewiththeretentionrequirementsunderthoseguidelines.
• Recoupment Policy. WehavearecoupmentpolicythatrequirestheCompanytorecoverallperformance-basedincentivepaymentsfromseniorexecutives,includingallofournamedexecutiveofficers,foundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductresultinginasignificantrestatementoftheCompany'sfinancialstatements.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.See"Compensation Discussion andAnalysis—Other Compensation Practices—Recoupment Policy" below.
• Independent Compensation Consultant. OurCompensationCommitteeusesanindependentcompensationconsultant,whichperformsnoconsultingorotherservicesfortheCompany.
• Environmental Policy. Wehaveanenvironmentalhealthandsafetypolicythatoutlinesourfocusonintegratingenvironmental,healthandsafetystewardshipintoourcorebusinessactivities.
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• Transactions in Company Securities (Anti-Hedging Policy). Ourinsidertradingpolicyprohibitsshortsalesofsharesofourcommonstockbydirectorsandexecutiveofficers.Italsoprohibitstheuseofequivalentderivativesecurities.
• Anti-Pledging Policy. Ourinsidertradingpolicyprohibitsourdirectors,officers,andkeyemployeesfromholdingoursecuritiesinamarginaccountorusingsuchsecuritiesascollateralforaloan.
Enterprise-WideRiskOversight
OurBoardofDirectors,assistedbyitscommittees,overseesmanagement'senterprise-wideriskmanagementactivities.Riskmanagementactivitiesincludeassessingandtakingactionsnecessarytomanageriskincurredinconnectionwiththelong-termstrategicdirectionandoperationofourbusiness.
ExecutiveCompensation
OurCompensationCommitteestrivestoestablishandmaintainanexecutivecompensationprogramthatwillattract,engage,reward,andretainhighlyeffectiveexecutiveofficers,rewardsuperiorperformance,andprovideincentivestodriveresultsthatincreasestockholdervalue.Ourcompensationprogramincludesamixofbasesalary,anannualcashincentive,performance-basedrestrictedstockunits,equityawards,andbenefitsandlimitedperquisitestoachievethisresult.Weemphasizeperformance-basedrewardsandtheuseofequity,whichdirectlyalignsourexecutiveswithstockholders.Executivepayistiedtoperformancemetricsthatencompassbothshort-andlong-termgoalsandencourageprofitablegrowthwhilediscouragingexcessiverisk-taking.
Highlights of our Executive Compensation Program
• Pay for Performance— Asignificantportionofthecompensationopportunityforourexecutiveofficersvariesbaseduponachievementofannualorlong-termgoalslinkedtostockholdervalue
• Increase Stockholder Value— Weusebalancedperformancemetricstoencourageoperationalperformancewhilediscouragingexcessiverisk-taking
• Align Executive Officers with Stockholders— Executivecompensationopportunitiesareweightedtowardequityawardsthatalignourexecutiveofficerswiththelong-terminterestsofourstockholders
Informationregardingcompensationpaidtoeachofournamedexecutiveofficersin2016isdescribedinthe"CompensationDiscussionandAnalysis"below.
Summary of 2016 Compensation Decisions Made for Our CEO
• Base Salary —$840,000
• Annual Cash Incentive —$1,524,600,paidat165%oftarget
• Equity Awards —$5,850,000,grant-dayvalueoftime-basedrestrictedstockaward("RSAs")andperformance-basedrestrictedstockunits("RSUs")
Strong Governance Standards in Oversight of Executive Compensation Policies
Wemaintainstronggovernancestandardsintheoversightofourexecutivecompensationpoliciesandpractices,including:
• anindependentCompensationCommitteethatengagesanindependentadvisor
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• stockownershipguidelinestoencourageourexecutiveofficerstohaveasignificantstakeinourlong-termsuccess
• performance-basedcompensationusingbalancedperformancemetricsandperformance-basedequityawardscappedat100%oftargetifourtotalshareholderreturnisnegative
• double-triggerchange-in-controlagreementsandequityawards
• noexcisetaxgross-upsandlimitedperquisites
• aprohibitiononbackdatingstockoptionsandonrepricingwithoutstockholderapproval
• arecoupmentpolicythatrequiresrecoveryofallperformance-basedincentivepaymentsfromanyexecutiveofficersfoundbytheBoardofDirectorstobepersonallyresponsibleforfraudorintentionalmisconductthatcausestheneedforasignificantfinancialrestatementandrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults
• aprohibitionon:
• shortsalesofourcommonstock
• theuseofequivalentderivativesecurities
• margintradinginourstockbydirectorsandexecutiveofficers
• pledgingofourstockbydirectorsandexecutiveofficers
Proposals
Proposal1—ElectionofDirectors(seepages10-18)
TheBoardhasnominatedelevencandidatesforelectiontoourBoardofDirectors.TheBoardrecommendsthatstockholdersvoteFORtheelectionofeachnominee.
Proposal2—AdvisoryVotetoApprovetheCompany'sExecutiveCompensation(seepages58-59)
TheBoardisseekinganadvisoryvotetoapprovetheCompany'sexecutivecompensation.Beforeconsideringthisproposal,pleasereadourCompensationDiscussionandAnalysis,whichexplainstheCompensationCommittee'scompensationdecisionsandhowourexecutivecompensationprogramalignstheinterestsofourexecutiveofficerswiththoseofourstockholders.AlthoughthevoteisadvisoryandisnotbindingontheBoard,theCompensationCommitteewilltakeintoaccounttheoutcomeofthevotewhenconsideringfutureexecutivecompensationdecisions.Forthereasonsdiscussedinthisproxystatement,theBoardrecommendsthatstockholdersvoteFORtheapprovaloftheCompany'sexecutivecompensation.
Proposal3—RatificationofIndependentRegisteredPublicAccountingFirm(seepage63)
TheAuditCommitteehasappointedErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2017.TheBoardisseekingstockholderratificationofthisappointment.TheBoardrecommendsthatstockholdersvoteFORratificationoftheselectionofErnst&YoungLLP.
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QUESTIONSANDANSWERSABOUTTHEANNUALMEETINGANDVOTING
1. WhatisthepurposeoftheAnnualMeeting?
AttheAnnualMeeting,stockholderswillactuponthemattersoutlinedintheNoticeofAnnualMeetingofStockholders.Theseincludetheelectionofdirectors,anadvisoryvotetoapproveourexecutivecompensation,andtheratificationoftheappointmentofErnst&YoungLLPasourindependentregisteredpublicaccountingfirm.ManagementandrepresentativesofErnst&YoungLLPwillbeavailabletorespondtoquestionsfromstockholders.
2. Whatisaproxy?
Itisyourlegaldesignationofanotherpersontovotethestockyouowninthemanneryoudirect.Thatotherpersoniscalledaproxy.Ifyoudesignatesomeoneasyourproxyinawrittendocument,thatdocumentalsoiscalledaproxyoraproxycard.WehavedesignatedDennisC.CameronandStephenE.BrilztoserveasproxiesfortheAnnualMeeting.TheBoardofDirectorswillusetheproxiesatthe2017AnnualMeetingofStockholders.Theproxiesalsomaybevotedatanyadjournmentsorpostponementsofthemeeting.
3. Whatisaproxystatement?
ItisadocumentwegiveyouwhenwearesolicitingyourvotepursuanttoSECregulations.
4. Whatisthedifferencebetweenastockholderofrecordandastockholderwhoholdsstockinstreetname?
Stockholders of Record. Ifyoursharesareregisteredinyournamewithourtransferagent,Computershare,youareastockholderofrecordwithrespecttothosesharesandtheNoticeortheproxymaterialsweresentdirectlytoyoubyComputershare.
Street Name Holders. Ifyouholdyoursharesinanaccountatabankorbroker,thenyouarethebeneficialownerofsharesheldin"streetname."TheNoticeorproxymaterialswereforwardedtoyoubyyourbankorbroker,whoisconsideredthestockholderofrecordforpurposesofvotingattheAnnualMeeting.Asabeneficialowner,youhavetherighttodirectyourbankorbrokeronhowtovotethesharesheldinyouraccount.
5. HowmanysharesmustbepresenttoholdtheAnnualMeeting?
InordertoconducttheAnnualMeeting,holdersofamajorityofthesharesentitledtovoteasofthecloseofbusinessontherecorddatemustbepresentinpersonorbyproxy.Thisconstitutesaquorum.YoursharesarecountedaspresentifyouattendtheAnnualMeetingorifyoursharesarerepresentedbyproxy.Abstentionsandbrokernon-voteswillbecountedaspresentforpurposesofestablishingaquorum.Ifaquorumisnotpresent,wewilladjourntheAnnualMeetinguntilaquorumisobtained.
6. HowcanIaccesstheproxymaterialsfortheAnnualMeeting?
Stockholdersmayaccesstheproxymaterials,whichincludetheNoticeofInternetAvailabilityofProxyMaterials,theNoticeofAnnualMeetingofStockholders,ProxyStatementandAnnualReportfortheyearendedDecember31,2016ontheInternetatwww.edocumentview.com/WPX.WewillalsoprovideahardcopyofanyofthesedocumentsfreeofchargeuponrequestassetforthintheNoticeofInternetAvailabilityofProxyMaterialsorbywritingusat:WPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.
Insteadofreceivingfuturecopiesofourproxymaterialsbymail,youcanelecttoreceiveane-mailthatwillprovideelectroniclinkstothesedocuments.Optingtoreceiveyourproxymaterialsonlinewillsavethecostofproducingandmailingdocumentstoyourhomeorbusiness,willgiveyouanelectroniclinktotheproxyvotingsiteandwillalsohelppreserveenvironmentalresources.
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Stockholders of Record. IfyouvoteontheInternetatwww.envisionreports.com/WPX,simplyfollowthepromptsforenrollingintheelectronicproxydeliveryservice.Youalsomayenrollintheelectronicproxydeliveryserviceatanytimebygoingdirectlytowww.envisionreports.com/WPXandfollowingtheenrollmentinstructions.
Street Name Holders. Ifyouholdyoursharesinabankorbrokerageaccount,youmayalsohavetheopportunitytoreceivetheproxymaterialselectronically.Pleasechecktheinformationprovidedintheproxymaterialsyoureceivefromyourbankorbrokerregardingtheavailabilityofthisservice.
7. HowdoIattendtheAnnualMeeting?WhatdoIneedtobring?
AllstockholdersasoftheRecordDatemayattend.Pleasebringtothemeeting:
Proof of Ownership, suchasacopyofyourNoticeorproxycard,oracopyofabrokerageorbankstatementshowingyourshareownershipasoftheRecordDate;and
Proof of Identification, suchasavaliddriver'slicenseorpassport.
Ifyouholdyoursharesinstreetname,youwillnotbeabletovoteyoursharesattheAnnualMeetingwithoutalegalproxy,asdescribedinQuestion8.
Pleasenotethatuseofcameras,phonesorothersimilarelectronicdevicesandthebringingoflargebags,packagesorsoundorvideorecordingequipmentwillnotbepermittedinthemeetingroom.Attendeeswillalsoberequiredtocomplywithrulesoforderandprocedurethatwillbeavailableatthemeeting.
8. HowcanIvoteattheAnnualMeetingifIownsharesinstreetname?
Ifyouareastreetnameholder,youmaynotvoteyoursharesattheAnnualMeetingunlessyouobtainalegalproxyfromyourbankorbroker.Alegalproxyisabank'sorbroker'sauthorizationforyoutovotethesharesitholdsinitsnameonyourbehalf.Toobtainalegalproxy,pleasecontactyourbankorbrokerforfurtherinformation.
9. WhatsharesareincludedontheNotice,proxycardorvotinginstructionform?
Ifyouareastockholderofrecord,youwillreceiveonlyoneNoticeorproxycardforallthesharesofcommonstockyouhold:
• incertificateform;and
• inbook-entryform.
IfyouholdsharesinourEmployeeStockPurchasePlan,youwillreceiveaseparateNoticeorproxycardapplicabletothoseshares.
Ifyouholdyoursharesinstreetname,youwillreceiveoneNoticeorvotinginstructionformforeachaccountyouhavewithabankorbroker.Ifyouholdsharesinmultipleaccounts,youmayneedtoprovidevotinginstructionsforeachaccount.
10. WhatdifferentmethodscanIusetovote?
ByWrittenProxy.Allstockholdersofrecordwhoreceivedproxymaterialsbymailcanvotebywrittenproxycard.IfyoureceivedaNoticeortheproxymaterialselectronically,youmayrequestaproxycardatanytimebyfollowingtheinstructionsontheNoticeoronthevotingwebsite.Ifyouareastreetnameholder,youwillreceiveinstructionsonhowyoumayvotefromyourbankorbroker,unlessyoupreviouslyenrolledinelectronicdelivery.
ByTelephoneorInternet.AllstockholdersofrecordcanvotebytelephonefromtheU.S.andCanada,usingthetoll-freetelephonenumberontheproxycard,orthroughtheInternetusingthe
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proceduresandinstructionsdescribedontheNoticeorproxycard.StreetnameholdersmayvotebyInternetortelephoneiftheirbankorbrokermakesthosemethodsavailable,inwhichcasethebankorbrokerwillenclosetheinstructionswiththeproxymaterials.TheInternetandtelephonevotingproceduresaredesignedtoauthenticatestockholders'identities,allowstockholderstovotetheirsharesandtoconfirmthattheirinstructionshavebeenproperlyrecorded.
InPerson.AllstockholdersofrecordmayvoteinpersonattheAnnualMeeting.StreetnameholdersmayvoteinpersonattheAnnualMeetingiftheyhavealegalproxy,asdescribedinQuestion8.
TheNoticeisnotaproxycardanditcannotbeusedtovoteyourshares.
11. Whatistherecorddateandwhatdoesitmean?
TherecorddatefortheAnnualMeetingisMarch27,2017.OnlyownersofrecordofsharesofcommonstockoftheCompanyatthecloseofbusinessontherecorddateareentitledtonoticeofandtovoteattheAnnualMeeting,oratanyadjournmentsorpostponementsoftheAnnualMeeting.OnMarch27,2017,therewere397,415,437sharesofcommonstockissued,outstandingandentitledtovote.Eachownerofrecordontherecorddateisentitledtoonevoteforeachshareofcommonstockheld.
TherecorddatewasestablishedbyourBoardofDirectorsasrequiredbytheGeneralCorporationLawoftheStateofDelaware.Ownersofrecordofcommonstockatthecloseofbusinessontherecorddateareentitledto:
• receivenoticeoftheAnnualMeeting;and
• voteattheAnnualMeetingandanyadjournmentsorpostponementsoftheAnnualMeeting.
12. IfIsubmitaproxy,mayIlaterrevokeitand/orchangemyvote?
Stockholdersmayrevokeaproxyand/orchangetheirvotepriortothecompletionofvotingattheAnnualMeetingby:
• signinganotherproxycardorvotinginstructionformwithalaterdateanddeliveringittotheCorporateSecretarybeforetheAnnualMeeting;
• votingagainovertheInternetorbytelephonepriorto11:59p.m.,EasternTime,onMay17,2017(or,ifyouareastreetnameholder,suchearliertimeasyourbankorbrokermaydirect);
• votingattheAnnualMeetingifyouareastockholderofrecordorareastreetnameholderthathasobtainedalegalproxyfromyourbankorbroker;or
• notifyingtheCorporateSecretaryoftheCompanyinwritingbeforetheAnnualMeeting.
13. Arevotesconfidential?Whocountsthevotes?
Weholdthevotesofallstockholdersinconfidencefromdirectors,officersandemployeesexcept:
• asnecessarytomeetapplicablelegalrequirementsandtoassertordefendclaimsorpotentialclaimsfororagainsttheCompany;
• incaseofacontestedorpotentiallycontestedproxysolicitation;
• ifastockholdermakesawrittencommentontheproxycardorotherwisecommunicateshisorhervotetomanagement;or
• toallowtheindependentinspectorsoftheelectiontocertifytheresultsofthevote.
WehaveretainedComputersharetotabulatethevotesandactasindependentinspectoroftheelection.
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14. Whataremychoiceswhenvotingfordirectornomineesandwhatvoteisneededtoelectdirectors?
Inthevoteontheelectionofdirectornominees,stockholdersmay:
• voteinfavorofanominee;
• voteagainstanominee;or
• abstainfromvotingwithrespecttoanominee.
DirectorswillbeelectedattheAnnualMeetinguponreceiptofmorevotescast"for"than"against"hisorherelection;abstentionswillnotcountasvotescastwithrespecttoadirector'selection.OurCorporateGovernanceGuidelinesrequiresalldirectorstotender,promptlyaftertheirelection,irrevocableresignationsfromtheBoardofDirectorsthatwillbeeffectiveifthedirectordoesnotreceiveagreaternumberofvotes"for"than"against"hisorherelectioninanuncontestedelection.Underthispolicy,theBoardofDirectorswilldeterminewhethertoacceptorrejecttheoffertoresignandpubliclydiscloseitsdecisionwithin90daysfromthedateofthecertificationoftheelectionresults.ThetextofthispolicyappearsinourCorporateGovernanceGuidelines,whichareavailableonourwebsiteatwww.wpxenergy.com.
TheBoardofDirectorsrecommendsavoteFOReachofthenominees.
15. WhataremychoiceswhenvotingoneachoftheotherproposalsconsideredattheAnnualMeeting?
Foreachoftheotherproposalsstockholdersmay:
• votefortheproposal;
• voteagainsttheproposal;or
• abstainfromvotingontheproposal.
16.16.WhatistheBoard'srecommendationwithregardtoeachproposal?
TheBoardofDirectorsmakesthefollowingrecommendationwithregardtoeachproposal:
• TheBoardofDirectorsrecommendsavoteFOReachofthedirectornominees.
• TheBoardofDirectorsrecommendsavoteFORadvisoryapprovaloftheCompany'sexecutivecompensation.
• TheBoardofDirectorsrecommendsavoteFORratificationoftheappointmentofErnst&YoungLLPasourindependentregisteredpublicaccountingfirm.
17. Whatvoteisneededtoapproveeachproposal?
PleaseseeQuestion14regardingthevotethatisneededfortheelectionofdirectors.
EachoftheremainingproposalsmustbeapprovedbytheholdersofamajorityofthesharespresentandentitledtovoteinpersonorbyproxyattheAnnualMeetinginordertopass.TheBoardofDirectorswillconsidertheresultoftheadvisoryvotetoapproveourexecutivecompensationwhenconsideringfutureexecutivecompensationdecisions.
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18. WhatifIdonotspecifyachoiceforamatterwhenreturningaproxy?
StockholdersshouldspecifytheirchoiceforeachmatterinthemannerdescribedintheNoticeorontheirproxycard.Ifnospecificinstructionsaregiven,proxiesthataresignedandreturnedwillbevoted:
• FORtheelectionofalldirectornominees;
• FORtheadvisoryapprovalofourexecutivecompensation;and
• FORtheratificationoftheappointmentofErnst&YoungLLPastheCompany'sindependentregisteredpublicaccountingfirm.
19. AremysharesvotedifIdonotprovideaproxy?
Ifyouareastockholderofrecordanddonotprovideaproxy,youmustattendtheAnnualMeetinginordertovote.Ifyouholdsharesthroughanaccountwithabankorbroker,yoursharesmaybevotedbythebankorbrokeronsomemattersifyoudonotprovidevotinginstructions.BanksandbrokershavetheauthorityunderNewYorkStockExchange("NYSE")rulestovotesharesforwhichtheircustomersdonotprovidevotinginstructionsonroutinematters.TheratificationofErnst&YoungLLPasourindependentregisteredpublicaccountingfirmisconsideredaroutinematter.Theelectionofdirectorsandthevotesontheothermattersdescribedinthisproxystatementarenotconsideredroutineandbanksandbrokerscannotvoteshareswithoutinstructiononthosematters.Sharesthatbanksandbrokersarenotauthorizedtovotearecountedas"brokernon-votes."
20. Howareabstentionsandbrokernon-votescounted?
Abstentionshavenoeffectontheelectionofdirectors,asonly"for"and"against"votesarecounted.Abstentionshavetheeffectofan"AGAINST"voteoneachoftheothermattersdescribedinthisproxystatement.Brokernon-voteswillbetreatedasnotpresentandnotentitledtovote.
21. DoestheCompanyhaveapolicyaboutdirectors'attendanceattheAnnualMeetingofStockholders?
TheCompanyexpectsdirectorstoattendtheAnnualMeeting,absentacompellingreason.
22. Whatarethedeadlinesforsubmittingstockholderproposalsforthe2018AnnualMeeting?
Stockholder Proposals to Be Considered for Inclusion in the Company's Proxy Materials. Tobeconsideredforinclusioninourproxystatementforour2018AnnualMeeting,stockholderproposalssubmittedinaccordancewiththeSEC'sRule14a-8mustbereceivednotlaterthanDecember5,2017andbesubmittedinaccordancewiththeSEC'sRule14a-8.StockholderproposalsreceivedafterthecloseofbusinessonDecember5,2017wouldbeuntimely.ThesestockholderproposalsmustbeinwritingandreceivedbythedeadlinedescribedaboveatourprincipalexecutiveofficesatWPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.Ifwedonotreceiveastockholderproposalbythedeadlinedescribedabove,theproposalmaybeexcludedfromourproxystatementforour2018AnnualMeeting.
Other Stockholder Proposals for Presentation at the 2018 Annual Meeting. Astockholderproposalthatisnotsubmittedforinclusioninourproxystatementforour2018AnnualMeeting,butisinsteadsoughttobepresentedatthe2018AnnualMeeting,mustcomplywiththe"advancenotice"deadlinesinourBylaws.Assuch,thesestockholderproposalsmustbereceivednoearlierthanJanuary18,2018,andnolaterthanthecloseofbusinessonFebruary17,2018.Thesestockholderproposalsmustbeinwritingandreceivedwithinthe"advancenotice"deadlinesdescribedaboveatourprincipalexecutiveofficesatWPXEnergy,Inc.,3500OneWilliamsCenter,Tulsa,Oklahoma74172,Attention:CorporateSecretary.ThesestockholderproposalsmustbeintheformprovidedinourBylawsandmustincludetheinformationsetforthintheBylawsaboutthestockholderproposingthebusinessandany
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associatedperson,includinginformationaboutthedirectandindirectownershipoforderivativepositionsintheCompany'scommonstockandarrangementsandunderstandingsrelatedtotheproposedbusinessorthevotingoftheCompany'scommonstock.Ifwedonotreceiveastockholderproposalandtherequiredinformationregardingthestockholderandanyassociatedpersonbythe"advancenotice"deadlinesdescribedabove,theproposalmaybeexcludedfromtheproxystatementandfromconsiderationatthe2018AnnualMeeting.The"advancenotice"requirementdescribedabovesupersedesthenoticeperiodinSECRule14a-4(c)(1)ofthefederalproxyrulesregardingthediscretionaryproxyvotingauthoritywithrespecttosuchstockholderbusiness.
23. Howareproxiessolicitedandwhatisthecost?
Webearallexpensesincurredinconnectionwiththesolicitationofproxies.Wewillreimbursebrokers,fiduciariesandcustodiansfortheircostsinforwardingproxymaterialstobeneficialownersofcommonstock.
Ourdirectors,officersandemployeesmayalsosolicitproxiesbymail,telephoneandpersonalcontact.Theywillnotreceiveanyadditionalcompensationfortheseactivities.
24. WherecanIfindmoreinformationaboutmyvotingrightsasastockholder?
TheSEChasaninformationalwebsitethatprovidesstockholderswithgeneralinformationabouthowtocasttheirvoteandwhyvotingshouldbeanimportantconsiderationforstockholders.Youmayaccessthatinformationatwww.sec.gov/spotlight/proxymatters.shtmloratwww.investor.gov.
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PROPOSAL1—ELECTIONOFDIRECTORS
DirectorNominationProcess
CriteriaforNominationtotheBoard
TheNominatingandGovernanceCommitteeCharter,whichisavailableonourwebsiteatwww.wpxenergy.comunder"Investors"and"CorporateGovernance,"providesthattheNominatingandGovernanceCommitteemustdevelopandrecommendtotheBoardqualificationsforassessingdirectorcandidatesandidentifyandrecommendtotheBoardindividualsfornominationasBoardmembers.
OurCorporateGovernanceGuidelinessetforthcriteriaforindependentdirectornominees.TheNominatingandGovernanceCommitteeevaluatespotentialBoardnomineesagainstthesecriteriaindeterminingwhethertorecommendanypotentialnomineeforconsiderationforelectionasamemberoftheBoard.Thesecriteriaincludethefollowing:
• Anunderstandingofbusinessandfinancialaffairsandthecomplexitiesofabusinessorganization.Althoughacareerinbusinessisnotessential,thenomineeshouldhaveaprovenrecordofcompetenceandaccomplishmentsthroughleadershipinindustry,education,theprofessionsorgovernment,andshouldbewillingtomaintainacommittedrelationshipwiththeCompanyasadirector.
• AgenuineinterestinrepresentingallofthestockholdersandtheinterestoftheCompanyoverall.
• Awillingnessandabilitytospendthenecessarytimetofunctioneffectivelyasadirector.
• Anopen-mindedapproachtomattersandtheresolvetoindependentlyanalyzematterspresentedforconsideration.
• Areputationforhonestyandintegritybeyondquestion.
• IndependenceasdefinedbytheNYSE,andqualificationsotherwiserequiredinaccordancewithapplicablelaworregulation.
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Thefollowingtablehighlightseachdirectornominee'sspecificskills,knowledgeandexperiences.Aparticulardirectormaypossessadditionalskills,knowledgeorexperienceeventhoughtheyarenotlistedbelow.Eachdirectorbiographybelowdescribestheskillsandexperiencesofdirectorsindetail.
TheNominatingandGovernanceCommitteeroutinelyevaluatesthecompositionoftheBoardtoassesstheskillsandexperiencethatarecurrentlyrepresentedontheBoard,aswellastheskillsandexperiencetheBoardwillfindvaluableinthefuture,giventheCompany'scurrentsituationandstrategicplans.TheNominatingandGovernanceCommitteeseeksavarietyofoccupationalandpersonalbackgroundsontheBoardinordertoobtainarangeofviewpointsandperspectivesandtoenhancethediversityoftheBoardinsuchareasasrace,gender,ethnicityandage.ThisassessmentenablestheBoardtoupdate,ifnecessary,theskillsandexperienceitseeksintheBoardasawhole,andinindividualdirectors,astheCompany'sneedsevolveandchangeovertime.
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JohnCarrig
WilliamGranberry
RobertHerdman
KeltKindick
KarlKurz
HenryLentz
GeorgeLorch
WilliamLowrie
KimberlyLubel
RichardMuncrief
DavidWork
E&POperations ü ü ü ü ü üOtherOil&GasOperations ü ü ü ü ü üHealth&Safety ü ü ü ü ü Engineering ü ü ü ü Geoscience ü ü ü üOil&GasRegulatory ü ü ü ü ü ü üAuditingandFinancialReporting ü ü ü ü CapitalMarketsandCorporateFinance ü ü ü ü ü ü Marketing ü ü ü ü ü LegalExpertise ü ü FinancialAnalysisExpertise ü ü ü ü ü ü ü InvestmentBanking/M&A ü ü ü CorporateGovernance ü ü ü ü ü ü ü ü ü ü üRiskManagement ü ü ü ü ü ü ü üHumanResourcesandCompensation ü ü ü ü ü ü üPublicPolicy ü ü ü ü ü ü StrategicPlanningandStrategyDevelopment ü ü ü ü ü ü ü ü ü ü üGovernmentExperience ü ü Digitaland/orInformationTechnologyOversight ü ü
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ProcessforIdentifyingandEvaluatingNominees
InconsideringpotentialcandidatestotheBoardwhoarenotincumbentdirectors,theNominatingandGovernanceCommittee,withinputfromthefullBoardofDirectors,assessesthepotentialcandidate'squalifications,takingintoaccountthecriterialistedabove,andhowthesequalificationsfitwiththedesiredcompositionoftheBoardofDirectorsasawhole.
Inthecaseofincumbentdirectors,inadditiontothecriterialistedabove,theNominatingandGovernanceCommitteereviewsthedirectors'overallperformanceontheBoardofDirectorsandotherrelevantfactors.
StockholderRecommendationsforNominees
TheNominatingandGovernanceCommitteewillconsidernomineesrecommendedbyourstockholders.AnystockholderwishingtoproposeanomineeforconsiderationbytheNominatingandGovernanceCommitteeshouldsubmitarecommendationinwritingtoourCorporateSecretaryatourprincipalexecutiveoffice,indicatingthenominees'qualificationsandotherrelevantbiographicalinformationandprovidingconfirmationofthenominee'sconsenttoserveasadirector.TheNominatingandGovernanceCommitteedoesnotintendtoalteritscriteriaforevaluatingpotentialdirectorcandidates,includingthecriteriasetforthabove,inthecaseofdirectorcandidatesrecommendedbystockholders.TheNominatingandGovernanceCommitteeperiodicallyconsidersrecommendationsfordirectorcandidates.
Ifyouwishtosubmitadirectornominationatafutureannualmeeting,youmustsupplytimelywrittennoticetotheCorporateSecretary.Forthe2018AnnualMeeting,thisnoticemustbereceivedatourprincipalexecutiveoffices,directedtotheCorporateSecretary,noearlierthanJanuary18,2018,andnolaterthanFebruary17,2018.ThenoticemustincludetheinformationsetforthintheBylawsabouteachproposednominee,including:(i)thename,age,businessaddress,residenceaddressandprincipaloccupationoremployment,businessexperienceduringthepastfiveyearsandanyotherdirectorshipsofpubliccompaniescurrentlyheldorheldduringthelastfiveyears,(ii)thenumberofsharesoftheCompany'scommonstockwhicharebeneficiallyowned,and(iii)otherinformationconcerningthenomineeaswouldberequiredinsolicitingproxiesfortheelectionofthatnominee.ThenoticemustalsoincludetheinformationsetforthintheBylawsaboutthestockholdermakingthenominationandanyassociatedperson,includinginformationaboutthedirectandindirectownershipoforderivativepositionsintheCompany'scommonstockandarrangementsandunderstandingsrelatedtotheproposednominationorthevotingoftheCompany'scommonstock.ThenoticemustalsoincludeasignedconsentofeachnomineetobenamedintheproxystatementasanomineeandtoserveasadirectoroftheCompanyifelected.Ifwedonotreceiveanoticeandtherequiredinformationregardingthenominee,thestockholderandanyassociatedpersonbythedeadlinedescribedabove,theproposednomineemaybeexcludedfromconsiderationbytheNominatingandGovernanceCommittee.TheNominatingandGovernanceCommitteewillonlyevaluatestockholder-recommendedcandidatesifthoserecommendationsmeettherequirementsdescribedinthisproxystatementandourBylaws.
2017DirectorNominees
ThefirstproposalforconsiderationattheAnnualMeetingistheelectionofeachoftheelevencandidatesnamedbelowasadirectorforaone-yeartermexpiringatour2018AnnualMeeting,oruntilhisorhersuccessorisdulyelectedandqualified.
Atour2015AnnualMeeting,stockholdersvotedtoeliminateprospectivelytheclassificationofdirectorsonourBoard.Previously,ourdirectorshadbeenclassifiedintothreeseparateclassesandheldofficeforstaggeredthree-yearterms.Effectiveasofthe2017AnnualMeeting,allofourdirectornomineeswillbeelectedforone-yearterms.OurBoardiscurrentlyfixedat11members.
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UpontherecommendationoftheNominatingandGovernanceCommittee,theBoardhasnominatedeachofthedirectorsidentifiedbelowasanomineeforaone-yeartermexpiringatthe2018AnnualMeetingofStockholdersoruntilhisorhersuccessorisdulyelectedandqualified.
TheBoardofDirectorsrecommendsthatyouvoteFORtheelectionofeachofthenominees.ProxieswillbevotedFORtheelectionofeachnomineeunlessyouspecifyotherwise.
Thefollowingpresentsabriefbiographicaldescriptionofeachdirectornominee,aswellasadiscussionofthespecificexperience,qualificationandskillsofeachdirectorthathelpedleadtheBoardtoconcludethateachrespectivedirectorshouldcontinuetoserveasamemberoftheBoard.
Nominees
John A. Carrig. Mr.CarrighasbeenadirectorsinceDecember2011.Mr.CarrigistheformerPresidentandChiefOperatingOfficerofConocoPhillips(alargeintegratedoilcompanywithoperationsinmorethan30countries).HejoinedPhillipsPetroleuminLondonin1978asataxattorney.In1981,hetransferredtoBartlesville,Oklahoma,andwasassociatedwiththecorporatetaxstaffuntil1993whenhejoinedthetreasurygroupasfinancemanager.HewasthennamedAssistantTreasurerofFinance,andin1995heacceptedthepositionofTreasurer.HewasVicePresidentandTreasurerfrom1996to2000whenhewasnamedSeniorVicePresidentandTreasurer.HewaselectedSeniorVicePresidentandChiefFinancialOfficerforPhillipsin2001,apositionhehelduntiltheConocoPhillipsmergeroccurredin2002,atwhichtimehebecameExecutiveVicePresident,Finance,andChiefFinancialOfficerofConocoPhillips.In2008,hewasappointedPresidentandChiefOperatingOfficerofConocoPhillipsandbecameresponsibleforglobaloperations,includingexplorationandproduction,refiningandtransportation,projectdevelopmentandprocurement,andhealth,safetyandenvironmentalmatters.Mr.CarrigservedasPresidentofConocoPhillipsuntilhisretirementinMarch2011.Mr.CarriggraduatedPhiBetaKappawithaB.A.fromRutgersUniversityandreceivedhislawdegreefromTempleUniversity.HealsoholdsanadvancedegreeintaxlawfromNewYorkUniversitySchoolofLaw.Mr.CarrigalsoservesasadirectorofForumEnergyTechnologies,Inc.(manufacturerofoilandgasfieldmachineryandequipment),TRCCompanies,Inc.(engineering,consultingandconstructionmanagementservicestotheenergy,environmentalandinfrastructuremarkets)andSkanskaAB(aglobalprojectdevelopmentandconstructioncompany).
WebelieveMr.CarrigiswellqualifiedtoserveasamemberofourBoard.Mr.Carrighasmanyyearsofexperienceinourindustry,includingoperating,financialandexecutiveexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.
William R. Granberry. Mr.GranberryhasbeenadirectorsinceDecember2011.Mr.GranberryservedasadirectorofTheWilliamsCompanies,Inc.("Williams")from2005untilDecember2011,and
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Name Age DirectorSince JohnA.Carrig 65 2011WilliamR.Granberry 74 2011RobertK.Herdman 68 2011KeltKindick 62 2013KarlF.Kurz 55 2014HenryE.Lentz 72 2011GeorgeA.Lorch 75 2011WilliamG.Lowrie 73 2011KimberlyS.Lubel 52 2011RichardE.Muncrief 58 2014DavidF.Work 71 2011
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servedasamemberofWilliams'CompensationCommitteeanditsFinanceCommittee.Mr.GranberrywasamemberofCompassOperatingCompanyLLC(asmall,privateoilandgasexploration,development,andproducingcompany)fromOctober2004throughDecember2013,atwhichtimeheretiredandsoldhisinteresttotheothermembers.From1999to2004,asanindependentconsultant,hemanagedinvestmentsandconsultedwithoilandgascompanies.From1996to1999,Mr.GranberrywasPresidentandChiefOperatingOfficerofTomBrown,Inc.(apublicoilandgascompanywithexploration,development,acquisition,andproductionactivitiesthroughoutthecentralUnitedStates).Hehasworkedintheoilandgasindustryinvariouscapacitiesfor50years,includingasamanagerofengineeringatAmoco(aglobalenergycompany)andinexecutivepositionsforsmallerindependentenergycompanies.Mr.Granberryhasservedoncommitteesandboardsofindustryorganizations,includingtheSocietyofPetroleumEngineers,theAmericanPetroleumInstitute,andtheIndependentProducersAssociationofAmerica.Mr.GranberryholdsB.S.andM.S.degreesinpetroleumengineeringfromtheUniversityofTexas.Mr.GranberryisadirectorofLegacyReservesGP,LLC(anindependentacquireranddeveloperofoilandnaturalgasproperties).
WebelieveMr.GranberryiswellqualifiedtoserveasamemberofourBoard.Mr.Granberryhasmanyyearsofexperienceinourindustry,includingexecutive,investmentandoperatingexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Granberryalsohasextensivepublicpolicyexperiencefromservingoncommitteesandboardsofindustryorganizations.
Robert K. Herdman. Mr.HerdmanhasbeenadirectorsinceDecember2011.Since2004,Mr.HerdmanhasbeenaManagingDirectorofKaloramaPartnersLLC(aWashington,D.C.consultingfirmspecializinginprovidingadviceregardingcorporategovernance,riskassessment,crisismanagementandrelatedmatters).PriortojoiningKalorama,Mr.HerdmanwastheChiefAccountantoftheSECfromOctober2001toNovember2002.PriortojoiningtheSEC,hewasErnst&Young'sViceChairmanofProfessionalPracticeforitsAssuranceandAdvisoryBusinessServices("AABS")practiceintheAmericasandtheGlobalDirectorofAABSProfessionalPracticeforErnst&YoungInternational.Mr.HerdmanwasalsotheseniorErnst&Youngpartnerresponsibleforthefirm'srelationshipwiththeSEC,FinancialAccountingStandardsBoardandAmericanInstituteofCertifiedPublicAccountants("AICPA").Mr.HerdmanservedontheAICPA'sSECPracticeSectionExecutiveCommitteefrom1995to2001andasamemberoftheAICPA'sBoardofDirectorsfrom2000to2001.HeholdsaB.S.C.inaccountingfromDePaulUniversity.Mr.HerdmaniscurrentlyontheboardofdirectorsofCumminsInc.andischairofitsauditcommittee.PriortoApril2015,heservedontheboardofdirectorsofHSBCFinanceCorporation(formerlyHouseholdInternational,Inc.),HSBCNorthAmericaHoldings,Inc.andHSBCUS,Inc.
WebelieveMr.HerdmaniswellqualifiedtoserveasamemberofourBoard.Mr.Herdmanhassignificantexperienceinfinanceandaccounting,includingexpertiseasthechairoftheauditcommitteesforpubliccompanies,andwebelievetheseexperiencesareimportanttohisabilitytounderstandandaddresschallengesandopportunitiesthatweface.Mr.Herdman'sSECandpublicaccountingexperienceprovidedhimwithinsightintothebusinessoperationsandfinancialperformanceofasignificantnumberofpubliccompanies,whichisadvantageoustousasapubliccompany.
Kelt Kindick. Mr.KindickhasbeenadirectorsinceJanuary2013.Mr.KindickservedaschieffinancialofficerandpartneratBain&Company,Inc.,amanagementconsultingfirm,fromJanuary2009untilhisretirementonDecember31,2012.HehasbeenservingasAdvisoryPartnerforBain&CompanysinceJanuary1,2013.HejoinedBain&Company,Inc.in1980,waselectedpartnerin1986,servedasManagingDirectorofthefirm'sBostonofficefrom1991to1996,andasChairmanofthefirm'sexecutivecommitteefrom1998to1999.Mr.KindickalsoservedaschieffinancialofficeroftheCommonwealthofMassachusettsfrom2003to2004.Mr.KindickistheleaddirectorofTheAdvisoryBoardCompany.HereceivedaB.A.degreefromFranklin&MarshallCollegeandanM.B.A.fromHarvardBusinessSchool.
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WebelievethatMr.KindickiswellqualifiedtoserveasamemberofourBoard.Hislongserviceataleadingmanagementconsultingfirm,wherehehasdevelopedextensiveexperienceinassessingandadvisingoncorporatestrategy,finance,operations,andtalentmanagement,aswellashisfinanceandaccountingexperience,willbeadvantageoustous.
Karl F. Kurz. Mr.KurzhasbeenadirectorsinceJanuary2014.FromSeptember2009untilhisretirementinSeptember2012,Mr.Kurzservedasamanagingdirector,co-headoftheenergygroupandamemberoftheinvestmentcommitteeatCCMPCapitalAdvisorsLLC,aleadingglobalprivateequityfirmwithafocusonenergyinvestments,amongotherareas.PriortojoiningCCMP,Mr.KurzspentnineyearswithAnadarkoPetroleumCorporation,mostrecentlyservingaschiefoperatingofficerresponsibleforoverseeingthecompany'sglobalexplorationandproduction,marketing,midstream,land,technologyandservicebusinesses.PriortojoiningAnadarko,Mr.KurzwasgeneralmanagerofmidstreamandmarketingforVastarResources,Inc.,wherehemanagedthecompany'smarketingofoil,naturalgasliquids,gasandgasprocessing.PriortojoiningVastarin1995,Mr.KurzheldmanagementpositionsatARCOOilandGasCompanyinseveralbusinessunitsincludingreservoirengineering,productionoperations,crudeoilmarketing,hedging,andfinancialtrading.Mr.KurzholdsaB.S,magna cum laude ,inpetroleumengineeringfromTexasA&MUniversityandheisagraduateofHarvardBusinessSchool'sAdvancedManagementProgram.Mr.KurzalsoservesasadirectorofSemGroupCorporation(midstreamservicesprovidertoindependentoilandgasproducersandrefiners)andAmericanWaterWorksCompany,Inc.(waterandwastewaterservicescompany).Mr.KurzservedasadirectorofWesternGasPartnersfromMay2008throughMarch2009andGlobalGeophysicalServices,Inc.(seismicdatasolutionsfortheoilandgasindustry)fromDecember2010throughDecember2014.
WebelieveMr.KurziswellqualifiedtoserveasamemberofourBoard.Mr.Kurzhasmanyyearsofexperienceinourindustry,includingexecutive,investmentandoperatingexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Kurzalsohasextensivepublicpolicyexperiencefromservingoncommitteesandboardsofindustryorganizations.
Henry E. Lentz. Mr.LentzhasbeenadirectorsinceDecember2011.InMay2011,Mr.LentzretiredfromLazardFrères&Co(aninvestmentbankingfirm),wherehehadservedasaManagingDirectorsinceJune2009.HewasaManagingDirectorofBarclaysCapital(aninvestmentbankingfirmandsuccessortoLehmanBrothersInc.)fromSeptember2008toJune2009.FromJanuary2004toSeptember2008hewasemployedasanAdvisoryDirectorbyLehmanBrothers.HejoinedLehmanBrothersin1971andbecameaManagingDirectorin1976.Heleftthefirmin1988tobecomeViceChairmanofWassersteinPerellaGroup,Inc.(aninvestmentbankingfirm).In1993,hereturnedtoLehmanBrothersasaManagingDirectorandservedasheadofthefirm'sworldwideenergypractice.In1996,hejoinedLehmanBrothers'MerchantBankingGroupasaPrincipalandinJanuary2003becameaconsultanttotheMerchantBankingGroup.Mr.LentzholdsaB.A.fromtheCollegeoftheHolyCrossandanM.B.A.fromtheWhartonSchoolofBusinessattheUniversityofPennsylvania.Mr.LentzservedasadirectorofRowanCompanies,Inc.from1990until2014,andservedasthenon-executiveChairmanbeginningin2009.HeiscurrentlyontheboardofdirectorsofPeabodyEnergyCorporation,MacquarieInfrastructureCorporationandCARBOCeramics,Inc.
WebelieveMr.LentziswellqualifiedtoserveasamemberofourBoard.Mr.Lentzhassignificantexperienceininvestmentbankingandfinancialmatters,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Lentzalsohascorporategovernanceexperienceasaresultofservingonotherpubliccompanyboardsofdirectors,whichisadvantageoustousasapubliccompany.
George A. Lorch. Mr.LorchhasbeenadirectorsinceDecember2011.Mr.LorchservedasadirectorofWilliamsfrom2001untilDecember2011,andservedasamemberofWilliams'
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CompensationCommitteeanditsNominatingandGovernanceCommittee.Mr.LorchwasChairmanEmeritusofArmstrongHoldings,Inc.,theholdingcompanyforArmstrongWorldIndustries,Inc.(amanufacturerandmarketeroffloors,ceilings,andcabinets).HewastheChiefExecutiveOfficerandPresidentofArmstrongWorldIndustries,Inc.from1993to1994andChairmanoftheBoardandChiefExecutiveOfficerfrom1994to2000.FromMay2000toAugust2000,hewasChairmanoftheBoardandChiefExecutiveOfficerofArmstrongHoldings,Inc.Mr.Lorchhas37yearsofsalesandmarketingexperienceatArmstrong,including17yearsofexperienceasaheadofoperations,withresponsibilityforstrategy,profitstatements,balancesheets,andstockholderrelations.Duringhismanyyearsasadirectorinvariedindustries,Mr.LorchhasparticipatedinCEOsearches,successionplanning,strategydevelopment,takeoverdefenseandoffense,anddirectorrecruitment,andhehasservedondozensofboardcommittees.Mr.LorchholdsaB.S.inbusinessadministrationfromVirginiaPolytechnicInstituteandStateUniversityandhasalsocompletedanexecutivemanagementcourseattheKelloggSchoolofManagementatNorthwesternUniversity.Mr.LorchservedasadirectorofPfizer,Inc.(aresearch-basedpharmaceuticalcompany)from2000untilApril2015,actingasNon-ExecutiveChairmanfromDecember2010toDecember2011,andasLeadIndependentDirectorfromDecember2011untilApril2015.HeistheLeadIndependentDirector,amemberoftheCompensationCommittee,andChairmanoftheNominatingandCorporateGovernanceCommitteeoftheboardofAutoliv,Inc.(adeveloper,manufacturer,andsupplierofautomotivesafetysystems),andadirector,amemberoftheCompensationCommittee,andChairmanoftheCorporateGovernanceandNominatingCommitteeoftheboardofMasonite(apubliclyhelddoormanufacturer).Mr.LorchhasservedasanadvisortotheCarlyleGroup(aprivateequityfirm).
WebelievethatMr.LorchiswellqualifiedtoserveasamemberofourBoard.Mr.Lorch'sexecutiveexperienceprovidesvaluablefinancialandmanagementexperience,includingexpertiseleadingalargeorganizationwithnationaloperations,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Lorchalsohasknowledgeandunderstandingofthestrategy,recruitment,compensationandcorporategovernanceissuesthatwefacefromhisextensiveexperienceasadirector.
William G. Lowrie. Mr.LowrieservedasChairmanofourBoardofDirectorsfromDecember2011untilJanuary2017,andhassinceservedasourindependentLeadDirector.Mr.LowrieservedasadirectorofWilliamsInc.from2003untilDecember2011,andservedasamemberofWilliams'AuditCommitteeanditsNominatingandGovernanceCommittee.In1999,Mr.LowrieretiredasDeputyChiefExecutiveOfficeranddirectorofBPAmocoPLC(aglobalenergycompany),wherehespenthisentire33-yearcareer.AtAmoco,Mr.Lowrieheldvariouspositionsofincreasingresponsibility,developingexpertiseindrilling,reservoirengineering,financialanalysisofprojects,andotherskillsrelatedtotheoilandnaturalgasexploration,production,andprocessingbusinesses.AtvarioustimesinhisAmocotenure,Mr.Lowriemanagednaturalgasandnaturalgasliquidspipelineoperations,hedgingandotherhydrocarbonpriceriskmitigationfunctions,internationalcontractnegotiations,petroleumproductrefiningandmarketingoperations,environmentalhealthandsafetyprogramdesign,andthedevelopmentandexecutionofaprocessformanagingcapitalinvestmentprojects.Mr.Lowriealsoworkedcloselywithallfinancialfunctions,internalandexternalauditors,andindustryorganizationssuchastheAmericanPetroleumInstitute.From1995to1999,Mr.LowrieservedontheboardofBankOneCorporation(nowJPMorganChase),includingonthatboard'sauditcommittee.HeholdsabachelorofchemicalengineeringdegreefromTheOhioStateUniversityandhasattendedtheExecutiveProgramattheUniversityofVirginia.Mr.LowrieisadirectorofTheOhioStateUniversityFoundationandatrusteeandchairmanoftheSouthCarolinachapterofTheNatureConservancy.HeischairmananddirectorofSCRTechnologies,Inc.,aprivatestart-uptechnologycompany.
WebelievethatMr.LowrieiswellqualifiedtoserveasamemberofourBoard.Mr.Lowriehasmanyyearsofexperienceinourindustry,includingoperating,financialandexecutiveexperience,and
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webelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Lowriealsohasextensiverisk-managementexperiencefromhistimeatBPAmocoandfromhisserviceonWilliams'AuditCommittee.
Kimberly S. Lubel. Ms.LubelhasbeenadirectorsinceDecember2011.ShehasservedasChairmanoftheBoard,PresidentandChiefExecutiveOfficerofCSTBrands,Inc.(apublicly-tradedretaileroftransportationfuelsandconveniencegoods)sinceMay2013.Ms.LubelhasalsoservedastheChairmanoftheBoardofthegeneralpartnerofCrossAmericaPartnersL.P.(apublicly-tradedmasterlimitedpartnership)sinceOctober2014,whenCSTBrandsacquiredthegeneralpartner.CSTBrandsenteredintoamergeragreementwithAlimentationCouche-TardInc.onAugust22,2016,andMs.LubelwillretirefromherpositionsatCSTBrandsandCrossAmericaPartnersfollowingtheclosingofthemerger.Theclosingisexpectedtooccurinthesecondquarterof2017.InJanuary2013,Ms.LubelbecameresponsiblefortheretailorganizationofValeroEnergyCorporation(alargeindependentrefineroftransportationfuelsandrelatedproducts)intheUnitedStatesandCanadaasExecutiveVicePresidentandPresidentRetail,andservedinthatcapacityuntilthespin-offoftheretailorganizationasCSTBrands,Inc.Ms.LubelpreviouslyservedfromOctober2008toDecember31,2012,asExecutiveVicePresidentandGeneralCounselforValerowithresponsibilityoverValero'slegal,advaloremtax,health,safetyandenvironmental,energyandgases,reliability,andprojectexecutiondepartments.ShejoinedValeroin1997asCorporateCounsel.FromApril2006toOctober2008,sheservedasSeniorVicePresident&GeneralCounsel.SheservedasleadattorneyformostofValero'smajoracquisitionsduringhertenurewithValero.Ms.LubelholdsaB.A.inSpanishandaB.A.ininternationalstudiesfromMiamiUniversity(Ohio),anM.A.ininternationalrelationsfromBaylorUniversity,andaJ.D.fromtheUniversityofTexasSchoolofLaw.SheisalsoagraduateoftheExecutiveProgramatStanfordUniversity.Ms.LubelservesontheTexasChristianUniversityChancellor'sAdvisoryCouncil.
WebelievethatMs.LubeliswellqualifiedtoserveasamemberofourBoard.Herchiefexecutiveofficerexperienceiscriticaltoherabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Asaresultofherexecutiveexperience,Ms.Lubelalsohasanunderstandingofcompensationandcorporategovernanceissuesthatweface.Herexperienceasleadattorneyforcomplextransactionswellpositionshertoadviseonanytransactionsthatwemayconsider.Herfamiliaritywithlegalandregulatoryissues,includingexpertiseoncomplexhealth,safety,andenvironmentalmatters,alsopositionsherwelltoadviseonsuchissues.
Richard E. Muncrief. Mr.MuncriefwasappointedPresidentandChiefExecutiveOfficeroftheCompanyonMay15,2014,andonJanuary1,2017hewasappointedChairmanoftheBoardofDirectorsaswell.HehadearlierservedsinceJune2009asSeniorVicePresident,OperationsandResourceDevelopmentofContinentalResources,Inc.PriortojoiningContinental,hewasemployedfromAugust2008throughMay2009byResourceProductionCompany,whereheservedasCorporateBusinessManager.FromSeptember2007toAugust2008,heservedasPresident,ChiefOperatingOfficerandasadirectorofQuestMidstreamPartners,LP.From1980to2007,heservedinvariousmanagerialcapacitieswithConocoPhillipsanditspredecessorcompanies,BurlingtonResources,MeridianOilandElPasoExploration.Mr.MuncriefholdsaB.S.inpetroleumengineeringtechnologyfromOklahomaStateUniversity.Mr.MuncriefservedasadirectorofApcoOilandGasInternationalInc.("Apco"),amajority-ownedsubsidiaryoftheCompanyuntilJanuary2015,fromAugust2014untilJanuary2015.
WebelieveMr.MuncriefiswellqualifiedtoserveasamemberofourBoard.Mr.Muncriefhasmanyyearsofexperienceintheupstreamandmidstreamenergybusiness,andwebelievethisexperiencewillbecriticaltohisabilitytoidentify,understandandaddressthechallengesandopportunitiesthatweface.AsourPresidentandChiefExecutiveOfficer,withintimateknowledgeofourbusinessandoperations,Mr.MuncriefbringsavaluableperspectivetotheBoard.Further,we
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believethatMr.Muncrief'sexperiencewithmanagingtheoperationsofalarge,publiccompanyisadvantageoustous.
David F. Work. Mr.WorkhasservedasadirectorsinceDecember2011.In2000,Mr.WorkretiredasRegionalPresidentfromBPAmocoCorporation(aglobalenergycompany)whereheservedinvariouscapacitiessince1987.AsRegionalPresident,Mr.WorkwastheseniorBPAmocorepresentativeintheGulfCoast,SouthwestandRockyMountainstates,andhisresponsibilitiesincludedcoordinatingthevicepresidentsofBPAmoco'ssevenexplorationandproductionbusinessunits,aswellastheleadersofthegas,power,oilandchemicalbusinesseslocatedinthearea.PriortoservingasRegionalPresident,Mr.WorkservedasaGroupVicePresidentinBPAmoco'sExplorationandProductionstreamandwasamemberofitsExecutiveCommittee.PriortothemergerbetweenBPandAmoco,Mr.WorkhadpositionsofincreasingresponsibilityatAmocoCorporation,includingSeniorVicePresidentofSharedServicesandGroupVicePresidentofworldwideexplorationfortheexplorationandproductionsector.Mr.WorkservedontheboardofdirectorsofCGGVeritasServiceHoldingsInc.(formerlyVeritasDGCInc.)from2004untilOctober2012.Since2009,hehasservedontheboardofdirectorsofHatCreekEnergy.Mr.WorkwasamanagementconsultantforTerraTek,aSchlumbergercompanyfortwoyears.Mr.WorkalsovolunteersasamemberoftheLandTrustAllianceAdvisoryCouncilandisamemberoftheboardoftrusteesoftheWyomingchapterofTheNatureConservancy,theTetonScienceSchoolandtheTetonRegionalLandTrust.HeholdsaB.A.ingeologyfromWesleyanUniversityandanM.S.ingeologyfromtheUniversityofCalifornia—SantaCruz.Mr.Workisinvolvedinseveralprofessionalorganizations,includingtheAmericanGeologicInstituteandtheAmericanAssociationofPetroleumGeologists.
WebelieveMr.WorkiswellqualifiedtoserveasamemberofourBoard.Mr.Workhasmanyyearsofexperienceinourindustry,includingoperatingandexecutiveexperience,andwebelievetheseexperiencesarecriticaltohisabilitytoidentify,understandandaddresschallengesandopportunitiesthatweface.Mr.Work'sextensiveexperienceinidentifyingexplorationandproductionopportunitiesisadvantageoustousasanindependentcompany.
CORPORATEGOVERNANCE
Overview
WPXiscommittedtohighstandardsofcorporategovernanceandethicalbusinessconduct.ImportantdocumentsthatarereflectiveofthiscommitmentincludeourCertificateofIncorporation,Bylaws,CorporateGovernanceGuidelines,chartersofthecommitteesofourBoardofDirectors,ourLeadDirectorCharter,andourCodeofBusinessConduct.Youcanaccessthesedocumentsatwww.wpxenergy.comunder"Investors"and"CorporateGovernance"tolearnmoreaboutourcorporategovernancepractices.
CorporateGovernancePractices
Someofourkeycorporategovernancepracticesinclude:
BoardStructure
• Majority Vote Standard. OurBylawsandCorporateGovernanceGuidelinesprovidethateachdirectormustbeelectedbyamajorityvoteinanuncontestedelection.OurCorporateGovernanceGuidelinesalsoprovidethatadirectornomineemustsubmitanirrevocableresignationeffectiveuponthefailuretoreceivemorevotescast"for"than"against"hisorherelectionorre-electionandBoardacceptanceofsuchresignation.
• Board Leadership Structure. TheBoardbelievesthatindependentleadershipisimportant.TheBoardalsobelievesthat,dependingonwhatappearstobeinthebestinterestsoftheCompany
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anditsstockholdersatanygivenpointintime,itshouldbeabletochoosewhethertherolesofChairmanoftheBoardandChiefExecutiveOfficerarecombinedorseparate.IncaseswheretheBoardbelievesthatthoserolesshouldbecombined,theindependentdirectorswillselectfromamongthemselvesanindividualwhoactsasLeadDirector.ThedutiesandresponsibilitiesoftheLeadDirectoraresetforthinaLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com.TheindependentdirectorsassesstheBoard'sleadershipstructureannuallyandconductannualperformanceevaluationsofboththeChairmanoftheBoardandtheLeadDirector.WhenthepositionsofChairmanoftheBoardandChiefExecutiveOfficerarecombined,theperformanceevaluationoftheChairmanoftheBoardroleisinadditiontotheperformanceevaluationoftheChiefExecutiveOfficerrole.
BoardandBoardCommitteesCompositionandPerformance
• Limitation on Public Company Directorships. Adirectormaynotserveonmorethanfivepubliccompanyboardsofdirectors(includingtheCompany's).
• Resignation Upon Change in Status. Eachofourdirectorsisrequiredtoofferhisorherresignationuponamaterialchangeinhisorherstatus,includingachangeinhisorherprincipalbusinessassociations.
• Executive Sessions. OurBoardofDirectorsandeachBoardcommitteeregularlyconductexecutivesessionsofnon-managementdirectors.OurLeadDirectorpresidesovereachexecutivesessionofnon-managementdirectors.CommitteeChairspresideoverexecutivesessionsoftheirrespectivecommittees.
• Independent Advisors. OurBoardofDirectorsandBoardcommitteeshavetheauthoritytoretainindependentadvisors.
• Annual Performance Reviews. OurBoardofDirectorsandBoardcommitteesconductperformancereviewsannually.
• New Director Orientations. NewdirectorsarerequiredtocompleteanorientationprogramuponjoiningtheBoard,andalldirectorsaregiventheopportunityandareencouragedtoparticipateincontinuingeducationprograms.
GuidelinesandBoardPolicies
• Stock Ownership Guidelines. Wemaintainstockownershipandretentionguidelinesfordirectorsandexecutiveofficers.See"Compensation Discussion andAnalysis—Other Compensation Practices—Stock Ownership Guidelines" and"Director Compensation."
• Approval Procedures for Related-Person Transactions. Wehavearelated-persontransactionsapprovalpolicyregardingthereview,approvalandratificationofrelated-persontransactionsinvolvingamemberoftheBoard,oneofourexecutiveofficers,oranyimmediatefamilymemberoraffiliateofsuchindividuals.TheAuditCommitteeandinsomecasesthefullBoardofDirectorsoverseesthisprocess.See"CertainRelationshipsandTransactions."
• Recoupment Policy. WehavearecoupmentpolicythatrequirestheCompanytorecoverallperformance-basedincentivepaymentsfromseniorexecutives,includingallofournamedexecutiveofficers,foundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductresultinginasignificantrestatementoftheCompany'sfinancialstatements.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.See"Compensation Discussion and Analysis—Other CompensationPractices—Recoupment Policy."
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• Communications Policy. WehaveacommunicationpolicythatoutlineshowstockholdersandotherinterestedpartiesmaycommunicatewiththeBoardofDirectors.See"BoardCommittees—CommunicationswiththeBoardofDirectors."
• Independent Compensation Consultant. OurCompensationCommitteehasthesoleauthoritytoretainorterminateitscompensationconsultantandannuallyreviewsitscompensationconsultant'sindependence.
• Environmental Policy. Wehaveanenvironmentalhealthandsafetypolicythatoutlinesourfocusonintegratingenvironmental,healthandsafetystewardshipintoourcorebusinessactivities.Consistentwiththispolicy,wehavepostedtoourwebsite(www.wpxenergy.com)areportthatsummarizestheeffortsweundertaketomanageandmitigateemissionsofmethane.
• Transactions in Company Securities (Anti-Hedging Policy). Ourinsidertradingpolicyprohibitsshortsalesofsharesofourcommonstockbydirectorsandexecutiveofficers.Italsoprohibitstheuseofequivalentderivativesecurities.
• Anti-Pledging Policy. Ourinsidertradingpolicyprohibitsourdirectors,officers,andkeyemployeesfromholdingoursecuritiesinamarginaccountorusingsuchsecuritiesascollateralforaloan.
IndependentAuditors
• Ratification of Auditor. Ourstockholdersannuallyratifytheselectionofourindependentregisteredpublicaccountingfirm.
• Limited Non-Audit Fees. The2016non-auditandnon-audit-relatedfeespaidtoourindependentregisteredpublicaccountingfirmwerelessthantwentypercentoftotalfeespaidtothatfirmbytheCompanyin2016.
CorporateGovernanceGuidelines
OurCertificateofIncorporationandBylaws,togetherwithDelawarelawandNYSEandSECrules,governtheCompany.OurCorporateGovernanceGuidelinessetforthmanyofthepractices,policiesandproceduresthatprovidethefoundationofourcommitmenttostrongcorporategovernance.ThepoliciesandpracticescoveredinourCorporateGovernanceGuidelinesincludeoperationoftheBoardofDirectors,Boardstructure,directorindependenceandBoardcommittees.OurCorporateGovernanceGuidelinesarereviewedatleastannuallybyourNominatingandGovernanceCommitteeandarerevisedasnecessary.
CodeofBusinessConduct
OurBoardhasadoptedaCodeofBusinessConductthatappliestoallemployees.OurCodeofBusinessConductispubliclyavailableonourwebsiteatwww.wpxenergy.com.AnywaiverofourCodeofBusinessConductwithrespecttotheChiefExecutiveOfficer,ChiefFinancialOfficerorController,orpersonsperformingsimilarfunctions,maybeauthorizedonlybyourAuditCommittee.Intheeventthatwemakeanychangesto,orprovideanywaiversfrom,theprovisionsofourCodeofBusinessConduct,weintendtodisclosesucheventsonourwebsiteorinareportonForm8-Kwithinfourbusinessdaysofsuchevent.
DirectorIndependence
OurCorporateGovernanceGuidelinesrequirethattheBoardmakeanannualdeterminationregardingtheindependenceofeachofourdirectors.BasedonanannualevaluationperformedbyandrecommendationsmadebytheNominatingandGovernanceCommittee,theBoardhasdeterminedthat
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eachofourcurrentdirectors,otherthanMr.Muncrief,isindependentundertheNYSElistingstandardsandtherulesandregulationsoftheSEC.TheBoard'sdeterminationofindependencetookintoaccountthe"brightline"standardsoftheNYSEandthestandardsforindependencecontainedinourCorporateGovernanceGuidelines,aswellastheabsenceofanymaterialtransactionsorotherrelationshipsbetweentheCompany,ontheonehand,anddirectors,theirimmediatefamilymembersandotherassociates,ontheother.TheBoardreviewedtransactionsbetweentheCompanyandothercompanieswhereadirectorservesasanon-employeedirector,orwhereadirectororfamilymemberofthedirectorservesasanexecutiveofficer,andconcludedthatnosuchtransactionwascontrarytoafindingofindependence.
BoardLeadershipStructure
OurBoardbelievesthat,dependingonwhatappearstobeinthebestinterestsoftheCompanyanditsstockholdersatanygivenpointintime,itshouldbeabletochoosewhethertherolesofChairmanoftheBoardandChiefExecutiveOfficerarecombinedorseparate.SinceJanuary2017,thepositionsofChairmanoftheBoardandChiefExecutiveOfficerhavebeenheldbyMr.Muncrief.TheBoardbelievesthatMr.Muncrief'sleadershipindevelopingandexecutingtheCompany'sstrategysince2014andhisdeepknowledgeoftheCompany'soperationsenablehimtofacilitatetheBoard'sresponsibilitiesforoverseeingtheCompanyanddrivingitscontinuedeffortstocreatevalueforstockholders.AstheChairmanoftheBoardandChiefExecutiveOfficer,Mr.MuncriefwillbewellpositionedtoidentifykeyissuesthatcallfortheBoard'sattentionandguidance.
TheBoardalsobelievesthatindependentleadershipisimportant,andtheCompany'sGovernanceGuidelinescallfortheindependentdirectorstoselectfromamongthemselvesaLeadDirectorwhentheroleofChairmanoftheBoardiscombinedwiththeroleofChiefExecutiveOfficer.InJanuary2017,theindependentdirectorsselectedMr.LowrieasLeadDirector.Mr.Lowriehadpreviouslyservedseveralyearsasnon-executiveChairmanoftheBoard,andhisserviceandleadershipinthatcapacitywillcontributetohisabilitytofulfilltheroleofLeadDirectoreffectivelyandindependently.
ThecurrentleadershipstructureoftheBoardisreviewedannuallybytheindependentdirectors.Inaddition,theindependentdirectorsannuallyconductperformanceevaluationsofboththeChairmanoftheBoardandtheLeadDirector.WhenthepositionsofChairmanoftheBoardandChiefExecutiveOfficerarecombined,theperformanceevaluationoftheChairmanoftheBoardroleisinadditiontotheperformanceevaluationoftheChiefExecutiveOfficerrole.
ThedutiesandresponsibilitiesoftheLeadDirectoraresetforthinaLeadDirectorCharterthatisavailableonourwebsiteatwww.wpxenergy.com,andincludethefollowing:
• presidesatexecutivesessionsoftheindependentdirectorsandhastheauthoritytocalladditionalexecutivesessionsormeetingsoftheindependentdirectors;
• presidesatBoardmeetingsintheabsenceoftheChairmanoftheBoard;
• servesasprincipalliaisonbetweentheChairmanoftheBoardandtheindependentdirectors;
• assistsintheselectionandpreparationofmeetingschedules,agendasandmeetingmaterialsfortheBoard;
• isavailableforconsultationanddirectcommunicationwithmajorstockholdersunderappropriatecircumstances;
• interviews,alongwiththeChairmanoftheBoardandtheChairmanoftheNominatingandGovernanceCommittee,allBoardcandidates,andmakesrecommendationstotheNominatingandGovernanceCommittee;and
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• oversees,inconsultationwiththeChairmanoftheBoard,theBoard'sannualgoalsandobjectives,whicharesubjecttoapprovalbythefullBoard.
TheBoardbelievesthatitisimportanttohavetheflexibilitytoputinplacealeadershipstructurethatpromoteseffectivegovernanceatangivenpointintimeandthat,underpresentcircumstances,thecurrentBoardleadershipstructureisinthebestinterestsoftheCompanyanditstockholders.
RiskOversight
Enterprise-Wide Risk Oversight. OurBoardoverseesmanagement'senterprise-wideriskmanagementactivities,eitherdirectlyorwiththeassistanceofitscommittees.Riskmanagementactivitiesincludeassessingandtakingactionsnecessarytomanageriskattendantonthelong-termstrategicdirectionandoperationofourbusiness.DiscussionswiththeBoardregardingtheCompany'scapitalandoperatingplan,businessresults,andcompetitiveenvironmentordinarilyincludeadiscussionoftherisksassociatedwiththeparticularitemunderdiscussion.TheBoard'scommitteesassistintheriskoversightfunctionasfollows:
• TheAuditCommitteeoverseesourfinancialcontrolsandcomplianceactivities,andregularlyevaluatessuchmattersasourfinancialreportinganddisclosure,ourrelationshipswithvendors,andourcapitalinvestmentandprojectexecution.Theenterpriseriskmanagementfunction,whichreportstoourChiefFinancialOfficer,assiststheCompanyinidentifyingandassessingtheCompany'smaterialrisks.TheCompany'sChiefInternalAuditor,whoalwayshasdirectaccesstotheAuditCommittee,assiststheCompanyinevaluatingriskmanagementcontrolsandmethodologies.Inconnectionwithitsoversightrole,theAuditCommitteeregularlymeetsprivatelywithrepresentativesfromtheCompany'sindependentregisteredpublicaccountingfirmandtheCompany'sChiefInternalAuditorandGeneralCounsel.
• TheCompensationCommitteeoverseesriskassociatedwithourhumancapitalandourcompensationpracticesandplans.
• TheNominatingandGovernanceCommitteeoverseesBoardprocessesandcorporategovernance-relatedrisk,includingrisksrelatedtoenvironmentalhealthandsafety,reputationandbranding,andlegislativeandregulatorymatters.
Enterprise-Wide Incentive Compensation Risk Assessment. WiththeoversightofourCompensationCommittee,weconductedariskassessmentoftheCompany'shumancapitalwithafocusonenterprise-widecompensationprograms.Theriskassessmentreviewedbothincentivecompensationplansandindividualincentiveawardspaidin2016forthepresenceofpotentialdesignelementsthatcouldincentemployeestoincurexcessiverisk.Theassessmentalsotookintoaccountthepresenceofotherdesignfeaturesthatservetomitigateexcessiverisk-taking,suchastheCompany'srecoupmentpolicy,stockownershipguidelines,andbalancedperformancemetrics.
Afterconsideringtheresultsoftheriskassessment,theCompensationCommitteeconcluded,anditsindependentadvisoragreed,thatthelevelofriskassociatedwiththeCompany'senterprise-widecompensationprogramsisnotreasonablylikelytohaveamaterialadverseeffectontheCompany.TheresultsoftheriskassessmentwerereviewedwiththeCompensationCommitteeatameetinginFebruary2017.Pleasesee"Compensation Discussion and Analysis—Other Compensation Practices—Consideration of Risk in Setting Executive Compensation" foradiscussionofdesignelementsintendedtomitigateexcessiverisk-takingbyourexecutiveofficers.
ExecutiveOfficers
Thefollowingpresentsabriefbiographicaldescriptionofeachofourexecutiveofficers(otherthanMr.Muncrief,whosebiographicalinformationappearsaboveunder"2017DirectorNominees").
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ExecutiveOfficer BiographicalInformationDennisC.Cameron
Age54SeniorVicePresidentandGeneralCounsel
Mr.CameronwasnamedSeniorVicePresidentandGeneralCounseloftheCompanyinDecember2013.Priortothattime,Mr.CameronhadservedasVicePresidentandDeputyGeneralCounseloftheCompanysinceJuly2013andAssistantGeneralCounselfromJanuary2012toJuly2013.Mr.Cameronhasover25yearsoflegalexperience.HestartedhiscareerinMay1987atGableGorwals,afull-servicelawfirm.From2008,Mr.CameronwasamemberoftheBoardofDirectorsofthefirm.Mr.Cameronremainsofcounseltothefirm.Mr.Cameron'spracticeatGableGotwalsconsistedprimarilyofcomplexlitigationinvolvingenergyinterestsincludingthedefenseofclassactionsandincludedcommerciallitigationwithanemphasisinoil&gasissues,productsliabilityandenvironmentallaw.Mr.Cameronservedasnationalcounseltoamajoroil&gascompanyonroyalty,severancetaxesandquitammattersandregionalcounseltotwootheroil&gascompaniesonsimilarmatters.Mr.Cameronalsorepresentedthreemajoroil&gascompaniesonFederalandIndianoil&gasmattersrelatedtoproductionthroughouttheUnitedStatesandoffshore.Mr.CameronwasselectedasNationalProductsliabilitycounseltoaninternationaltoolmanufacturer.Mr.CameronreceivedaBachelorofScienceinMechanicalEngineeringfromtheUniversityofOklahomaandJurisDoctorfromtheUniversityofOklahomaCollegeofLaw.
ClayM.Gaspar
Age45SeniorVicePresidentandChiefOperatingOfficer
Mr.GasparhasservedasSeniorVicePresidentandChiefOperatingOfficersinceNovember2015.FromOctober2014untilNovember2015,heservedasSeniorVicePresidentofOperationsandResourceDevelopment.FromJuly2012untilOctober2014,Mr.GasparservedasVicePresident—Mid-ContinentforNewfieldExplorationCompany.PriortojoiningNewfield,Mr.Gasparspent16yearswithAnadarkoPetroleumCorporationwhereheservedasGeneralManagerofInvestorRelationsfrom2011-2012,GeneralManager,BusinessAdvisorfrom2009-2011andGeneralManager,EastTexasfrom2007-2009.From1996-2007,Mr.GasparservedinvariousengineeringandmanagementpositionsatAnadarko.Mr.GasparstartedhiscareerwithMewbourneOilCompanyasaproductionanddrillingengineerwhereheworkedpart-timeasastudentfrom1991-1995andthenfull-timefrom1995-1996.HeisamemberoftheSocietyofPetroleumEngineersandholdsaBachelorofSciencedegreeinPetroleumEngineeringfromTexasA&MUniversityandaMasterofSciencedegreeinPetroleumandGeosciencesEngineeringfromtheUniversityofTexasatAustinandisaRegisteredProfessionalEngineerinthestateofTexas.
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ExecutiveOfficer BiographicalInformationBryanK.Guderian
Age57SeniorVicePresidentofBusinessDevelopment
Mr.GuderianhasservedasSeniorVicePresidentofBusinessDevelopmentsinceMay2016.Priortothattime,Mr.GuderianhadservedasSeniorVicePresidentofBusinessDevelopmentandLandfromOctober2014untilMay2016.Mr.GuderianhadservedasSeniorVicePresidentofOperationsfromDecember2011untilOctober2014.From1998untilDecember2011,Mr.GuderianservedasVicePresidentoftheExploration&ProductionunitofTheWilliamsCompanies,Inc.withresponsibilityforoperationalandcommercialmanagementofexplorationandproductionassetsintheMarcellusShale,theSanJuanBasinandotherbasins.Mr.GuderianalsohadresponsibilityforoverseeingWilliams'internationaloperations.HeservedasadirectorofApcoInternationalOilandGasInc.("Apco")from2002until2015andadirectorofPetroleraEntreLomasS.A.from2003until2015.Mr.GuderianservedasChiefExecutiveOfficerofApcofrom2013until2015.Mr.GuderianjoinedWilliamsin1991asagasmarketingrepresentative.Mr.GuderianholdsabachelorofbusinessadministrationdegreeinpetroleumlandmanagementfromtheUniversityofOklahoma.HeservesasadirectorofNGLEnergyPartners,LP.
J.KevinVann
Age45SeniorVicePresidentandChiefFinancialOfficer
Mr.VannhasservedasSeniorVicePresidentandChiefFinancialOfficerinMarch2014.Mr.VannhadalsoservedasTreasurerfromSeptember2014toNovember2014.PriortohisappointmentasSeniorVicePresidentandChiefFinancialOfficer,Mr.VannhadservedasVicePresident,ChiefAccountingOfficerandControllersinceDecember2011.FromJune2007untilDecember2011,Mr.VannservedasControllerfortheexplorationandproductionbusinessunitofWilliams.HewasControllerforWilliamsPowerCompanyfrom2006to2007andDirectorofEnterpriseRiskManagementforWilliamsfrom2002to2006.InhisControllerpositions,hewasresponsibleforthedevelopmentandimplementationofinternalcontrolstoensureeffectivefinancialandbusinesssystems,accuratefinancialstatementsandthetimelyprovisionofappropriateinformationandanalysistoassistinthestrategicmanagementofthecompany.AsDirectorofEnterpriseRiskManagementforWilliams,hewasresponsiblefortheaggregationandmeasurementofcommodityandcreditrisk.Mr.VannalsoservedasadirectorApcofrom2014to2015.Mr.VannholdsaB.S.inaccountingfromOklahomaStateUniversity.
BoardMeetingsandAnnualMeetingAttendance
DirectorsareexpectedtoattendBoardmeetings,meetingsofcommitteesonwhichtheyserveandtheAnnualMeetingofStockholders.DuringtheyearendedDecember31,2016,theBoardofDirectorsheldninemeetings.AlldirectorswhoweremembersoftheBoardofDirectorsin2016attendedatleast75%ofthemeetingsoftheBoardandanyBoardcommitteesofwhichtheyweremembers.Eachofourdirectorsattendedour2016AnnualMeetingofStockholders.
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BoardCommittees
TheBoardofDirectorshasestablishedthreestandingcommittees:theAuditCommittee,theCompensationCommitteeandtheNominatingandGovernanceCommittee.ThesecommitteeshelptheBoardofDirectorsfulfillitsresponsibilitiesandassisttheBoardofDirectorsinmakinginformeddecisions.Eachcommitteeoperatespursuanttoawrittencharter,eachofwhichisavailableonourwebsiteatwww.wpxenergy.com,andevaluatesitscharterandconductsacommitteeperformanceevaluationannually.
Thedirectorsserveonthecommitteesassetforthbelow.
AuditCommittee
TheAuditCommitteeconsistsofMessrs.Herdman(Chair),Carrig,andKindick,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherulesandregulationsoftheSECandeachofwhomisfinanciallyliterate.TheBoardofDirectorshasdeterminedthateachofMessrs.Carrig,HerdmanandKindickhasaccountingorrelatedfinancialmanagementexpertiseandisqualifiedasan"auditcommitteefinancialexpert"asdefinedbytherulesandregulationsoftheSEC.YoushouldunderstandthatthesedesignationsaredisclosurerequirementsoftheSECandtheNYSErelatingtothemembers'experienceandunderstandingofaccountingandauditingmatters.ThesedesignationsdonotaffecttheobligationsorliabilityofBoardorAuditCommitteemembersgenerally.TheAuditCommitteeisresponsibleforoverseeingouraccountingandfinancialreportingprocessesandauditsofourfinancialstatements,publicdisclosureandcomplianceactivitiesandfortheselectionandretentionoftheindependentregisteredpublicaccountingfirm.TheAuditCommitteeheldeightmeetingsin2016.
CompensationCommittee
TheCompensationCommitteeconsistsofMessrs.Granberry(Chair),Lentz,andWork,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherulesandregulationsoftheSECandeachofwhommeetsthedefinitionofanoutsidedirectorundertheInternalRevenueCodeof1986,asamended(the"IRC").TheCompensationCommitteeisresponsibleforoverseeingthedesignandimplementationofstrategicexecutivecompensationprogramsthatpromotetheattraction,retention,andappropriaterewardofexecutiveofficersandaredesignedtomotivatetheCompany'sexecutiveofficerstowardtheachievementofbusinessobjectivesandtoaligntheexecutiveofficers'focuswiththelong-terminterestofthestockholders.TheCompensationCommitteealsomakesrecommendationstotheBoardregardingthecompensationofourChiefExecutiveOfficerandassiststheBoardinfulfillingitsresponsibilitytooverseetheestablishmentandadministrationoftheCompany'scompensationprograms,includingincentivecompensation,equity-basedplans,andrelatedmattersforemployeessubjecttoSection16oftheSecuritiesExchangeActof1934,asamended(the"ExchangeAct").TheCompensationCommitteealsomonitorscompliancebydirectorsandtheexecutiveofficerswiththeCompany'sstockownershipguidelines.TheCompensationCommitteeheldninemeetingsin2016.
NominatingandGovernanceCommittee
TheNominatingandGovernanceCommitteeconsistsofMr.Lorch(Chair),Ms.LubelandMr.Kurz,eachofwhomisanindependentdirectorundertheNYSElistingstandardsandtherules
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Audit Compensation NominatingandGovernanceRobertK.Herdman,Chair WilliamR.Granberry,Chair GeorgeA.Lorch,ChairJohnA.Carrig HenryE.Lentz KimberlyS.LubelKeltKindick DavidF.Work KarlF.Kurz
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andregulationsoftheSEC.TheNominatingandGovernanceCommittee'sdutiesincludeindentifyingandrecommendingqualifiedindividualstobeproposedasnomineesforelectiontotheBoardattheannualmeetingofstockholdersanddeveloping,reviewingannuallyandrecommendingtotheBoardchangestoourCorporateGovernanceGuidelines.TheNominatingandGovernanceCommitteealsoreviewsthesizeandcompositionoftheBoardanditscommitteesandrecommendsanychangestotheBoard,establishesaprocessforandassessesdirectorindependenceandoverseestheevaluationoftheBoardanditscommittees.TheNominatingandGovernanceCommitteeheldfourmeetingsin2016.
CommunicationswiththeBoardofDirectors
Anystockholderorotherinterestedpartymaycommunicatewithourdirectors,individuallyorasagroup,theLeadDirector,ortheindependentdirectorsasagroup,bycontactingourCorporateSecretaryortheChairmanoftheBoard.ThecontactinformationismaintainedontheInvestorRelationspageofourwebsiteatwww.wpxenergy.com.
Thecurrentcontactinformationisasfollows:
WPXEnergy,Inc.
3500OneWilliamsCenterTulsa,Oklahoma74172Attn:CorporateSecretary
Wewillforwardcommunicationstotherelevantdirector(s)unlessthecommunicationsareofapersonalnatureornotrelatedtothedutiesandresponsibilitiesoftheBoardofDirectors,including,withoutlimitation,junkmail,massmailings,businesssolicitations,spam,surveysandroutineproductorbusinessinquiries.
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EXECUTIVECOMPENSATION
ExecutiveSummary
Buildingonthegroundworklaidduring2015,wedeliveredsolidresultsin2016,includingsignificantlyimprovedshareholderreturn.InJanuary,ourexecutiveofficersintroducedfivestrategicimperativestoenableourcompanytomaintainfocusdespitetremendouspressurefrommarketconditions.Thesestrategicimperativeswere:
• Integrity&Trust:maintaininghighethicalstandardsanddoingtherightthingforourstakeholders
• FinancialHealth:actingpromptlyandprudentlytoensureourfinancialwell-being
• OperationalExcellence:buildingadata-drivenlearningculturefoundedontop-tieroperationalcompetency
• PortfolioOptimization:criticallyevaluatingeachassettoimprovethequalityandsizeofourportfolio
• OrganizationalDevelopment:retainingtheindustry'sbestpeopleandprovidinganorganizationalstructurethatpromotesproductivity
Duringtheyear,ourexecutiveofficersledeffortstoachievesustainablegrowthbaseduponourworld-classassets.Specificaccomplishmentsfor2016include:
• Loweringwellcostandincreasingestimatedunitsofrecovery("EURs")acrossallbasins
• Decouplingand/orself-sourcingdrillingandcompletionservicestoachieveadditionalcostsavings
• Settingacompanyrecordforoilproductioninthefourthquarter
• Increasingoutputbycompletingthedrilledbutuncompleted("DUC")inventoryintheWillistonbasin
• Achievingareservesreplacementrateinbasinswecontinuetooperateof317%
• PlacingthefirstsegmentofthePermianbasincrudelineinservice
• Retiringoutstanding2017seniornotesaheadofschedule
Inaddition,ourtotalshareholderreturnin2016wasthehighestofourpeergroup,at154%comparedtoaverageTSRofourpeercompaniesof46%.
Our2016annualincentivemetrics—ProductionVolume,AdjustedEBITDAX,DevelopmentEfficiencies,andaDiscretionarycomponent—effectivelyincentedourexecutiveofficerstofocusonthestrategicimperativestodeliverimprovedshareholderreturn.Ourexecutivemanagementteamsuccessfullynavigatedthroughasignificantindustrydownturn,positioningthecompanyforsubstantial,sustainablegrowthatcurrentstrippricing.
Underourannualincentiveplan,weawarded165%oftargetbaseduponperformanceagainstpre-definedmetricsandtheDiscretionarycomponent.Overtwo-thirdsoftheannualincentiveawardwasattributabletothethreequantifiablemetrics,andslightlylessthanone-thirdresultedfromtheDiscretionarycomponent.Thisallocationofthefinalawardpayoutisroughlyinlinewiththeannualincentivemetrics,ofwhich70%werequantifiableand30%wasdiscretionary.See"Annual Cash Incentive" foradditionalinformationabouttheannualincentivemetricsandhowtheawardwascalculated.
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Ourlong-termincentiveplanpaidoutattarget.Themetricforthelong-termincentiveawardwasTotalShareholderReturn("TSR")relativetoourpeergroup.TSRoverthethree-yearperformanceperiod,2014-2016,wasinthe64thpercentileofourpeergroup,orinthesecondquartile.Althoughthepayoutrangeadoptedatthetimetheseperformance-basedRSUsweregrantedprovidedforapayoutat150%forthislevelofperformancerelativetoourpeers,thepayoutfortheseunitswascappedat100%becauseabsoluteTSRovertheperformanceperiodwasnegative.See"Vesting of 2014 Performance-Based RSUs" foradditionalinformationaboutthisaward.
Duetothelowmarketvalueforourcommonstockinthefirstquarter,uncertaintiesinthebroaderE&Pmarket,andaplannedreorganizationofourcompany,ourCompensationCommitteedecidedtodelaytheannualequitygrantuntilMay19.Thisdelayavoidedinflatingtheannualgrantduetoourlowfirst-quarterstockpriceandreducedthetotalsizeoftheannualequitygrantby1,542,971shares.See"Long-Term Incentives "fordetailsaboutthe2016annualequitygrantandresultingreductioninthenumberofsharesgranted.
CompensationDiscussionandAnalysis
Ourexecutivecompensationprogramincludesseveralfeaturesdesignedtoaligntheinterestsofourexecutiveofficerswiththeinterestsofourstockholders:
• ThemajorityofcompensationpaidtoourCEOisperformance-based
• Weuseabalancedapproachtoperformancemetricstofocusexecutiveofficersonexecutingourstrategywhilediscouragingexcessiverisk-taking
• Ourstockownershipguidelinesrequireourexecutiveofficerstohaveasignificantstakeinourlong-termsuccessandaligntheirinterestswithstockholderinterests
• OurCompensationCommitteeregularlyreviewsoverhanglevelsandtheannualrunrate
• Ourrecoupmentpolicyrequiresrecoveryofallperformance-basedincentivepaymentsfromexecutiveofficersfoundtoberesponsibleforfraudorintentionalmisconductthatresultsinasignificantrestatementofourfinancialresultsaswellasrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults
• Ourchange-in-controlagreementshaveadoubletriggerforcashpayments,equityawards,andotherbenefitssotheyarenottriggeredsolelyonachange-in-control
• WeprovideverylimitedperquisitestoourNEOs
• OurCompensationCommitteeengagesanindependentcompensationconsultanttoprovidecompetitivemarketdataforourexecutiveofficersandtoleaddiscussionsontrendswithinourindustry
• Whenmakingcompensationdecisions,ourCompensationCommitteeusestallysheetstoconsidertotaloutstandingequityvalueandestimatesofamountsthatwouldbepaidinvariousterminationscenarios
Inaddition,wehaveadoptedpoliciesandprovisionstoensurewedonotengageinpracticesthatcouldbedetrimentaltostockholders:
• Ourperformance-basedRSUprogramprohibitspayoutsinexcessof100%oftargetifabsoluteTSRisnegative,regardlessoftherankingofourTSRrelativetopeers
• Otherthanthelimited-term,three-yearemploymentcontractenteredintowithourCEOinconnectionwithhisrecruitment,wedonotprovideemploymentcontractstoanyofourexecutiveofficers
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• Wedonotprovidegross-upstocoverpersonalincometaxesthatpertaintoseverancebenefitsorthelimitedperquisitesweoffer
• Ourinsidertradingpolicyprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesbyourdirectorsandexecutiveofficers
• Wedonotpermitourdirectorsorexecutiveofficerstoengageinmargintradingofourstock
• Ouranti-pledgingpolicyprohibitsourdirectorsorexecutiveofficersfromholdingourcommonstockinamarginaccountorpledgingourcommonstockascollateralforaloan
• Ourincentiveplanprohibitsthebackdatingofstockoptionsandtherepricingofstockoptionswithoutstockholderapproval
CompensationPhilosophy
Weprovideacompetitivetotalrewardsprogramdesignedtoattract,engage,reward,andretainhighlyeffectiveexecutiveofficerstodeliveronourbusinessplananddriveresultsthatincreasestockholdervalue.WeintendtomaintaincompensationprogramsthatareinthebestinterestofWPXandourstockholderswhilerewardingourexecutiveofficersthroughapaymixthatbalancesshort-andlong-termperformanceanddiscouragesexcessiverisk-taking.Establishingthepropercompensationmixiscriticaltoourpay-for-performanceapproachinengagingexecutiveofficerstocarryoutourbusinessstrategy.
OurCompensationCommitteebelievespayforourexecutiveofficersshouldemphasizeperformance-basedrewardsandtheuseofequity.Performance-basedcompensation,whichincludestheAnnualIncentiveProgram("AIP")andperformance-basedRSUs,comprisesamajorportionofourexecutivecompensation,whilebasesalaryisamuchsmallerpercentage.Equity,whichdirectlyalignsourexecutiveswithstockholders,comprisesamuchgreaterportionofcompensationtoourNEOsthancashcompensation.
Weimplementourcompensationphilosophyby:
• makingamajorityofCEOpayperformance-based,subjecttoincreasewhenweexceedperformancetargetsandreductionwhenwedonotachieveperformancetargets
• tyingpaytoperformancemetricsthatencompassbothshort-andlong-termgoalsandencourageprofitablegrowthwhilediscouragingexcessiverisk-taking
• deliveringamajorityofcompensationintheformofequity,whichdirectlytiestheinterestsofourNEOstostockholdersandcausesthevalueoftheircompensationtovarybaseduponourstockprice
DeterminationofTotalCompensation
Role of our Compensation Committee and Board of Directors
OurCompensationCommitteeoverseesthedesignandimplementationofourcompensationprograms,includingsettingperformancemetricsandgoalsforourannualandlong-termincentives,andapprovescompensationfortheNEOs,exceptfortheCEO.FortheCEO'scompensation,theCommitteemakesrecommendationstotheindependentmembersoftheBoardofDirectors,whichhasresponsibilityforapprovingtheCEO'scompensation.TheCommitteemakesdecisionswithrespecttoexecutiveofficercompensationbasedonthefollowingfactors:
• theperformanceofeachexecutiveofficerandthevalueoftheroletoWPX
• marketdatafromourpeergroup,thebroaderE&Pindustry,andgeneralindustry
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• internalpayequityconsiderations,suchasrelativescopeofresponsibilityofeachposition
• inputfromtheCEO(forexecutiveofficersotherthanhimself)
• inputfromtheCommittee'sindependentcompensationconsultant
ThroughoutthisCD&A,whenreferencesaremadetodecisionsabouttheCEO'scompensation,thoseweremadebytheindependentmembersoftheBoardofDirectorsafterconsideringtherecommendationoftheCommittee.
Consideration of 2016 Stockholder Advisory Vote to Approve 2015 Executive Compensation
In2016,wereceivedafavorableadvisoryvoteonourexecutivecompensationprogram,withapproximately96percentoftheCompany'ssharesvotinginfavoroftheexecutivecompensationprogram.OurCompensationCommitteedidnotchangeitsapproachin2016basedontheresultsoftheadvisoryvote.TheCommitteewillcontinuetomonitorandconsidertheoutcomesoftheannualadvisoryvotesonourexecutivecompensationprogramwhenmakingdecisionsforourexecutiveofficers.
Role of the Compensation Committee's Independent Compensation Consultant
OurCompensationCommitteeretainsanindependentconsultant,FWCook,toadviseonexecutiveanddirectorcompensationmatters,assesstotalcompensationlevelsandelementsofpayforexecutiveofficers,evaluatecompetitivecompensationtrends,andidentifyanappropriatepeergroupforexecutivecompensationplanning.Inaddition,theindependentcompensationconsultantmanagestheprocessbywhichtheBoardofDirectorsevaluatestheCEO'sperformance.TheCommitteemeetswithitsindependentconsultantwithinandoutsidethepresenceofmanagementandhasthesoleauthoritytoretainandterminateitsindependentconsultant,includingsoleauthoritytoapproveitsfeesandretentionterms.FWCookprovidesnootherservicestoWPXanddoesnotperformanyworkformanagement.
ConsistentwiththerequirementinourCompensationCommitteecharter,theCommitteeannuallyreviewstheindependenceofitscompensationconsultantconsideringthefactorssetforthintheNYSElistingstandards.For2016,theCommitteefoundthatFWCookcontinuestomeettheNYSElistingstandardsforindependence.
Role of Management and Executive Officers
AlthoughmanagementprovidesinputtotheCompensationCommitteeasitsetsperformancemetricsandgoalsforourannualandlong-termincentives,managementdoesnotsetcompensationforourexecutiveofficers.OurCEOprovideshisevaluationoftheperformanceoftheexecutiveofficersthatreporttohimandmakescompensationrecommendationstotheCommittee,whichthendeterminescompensationfortheseexecutiveofficers.OurCEOalsoprovidesanassessmentofhisownperformancetoboththeCompensationCommitteeandBoardofDirectorsbutdoesnotparticipateintheprocessofsettinghisowncompensation.
Competitive Positioning
OurCompensationCommitteemakesdecisionsabouttheappropriatemixbetweenfixedandvariablepayandbetweencashandequity.TheCommitteemakesthesedecisionsinthecontextofthecompetitivemarketforexecutivetalent,whilealsoconsideringhoweachelementofpayfurtherstheobjectivesofourcompensationprogram.Toevaluatethismarket,theCommittee,withtheadviceandassistanceofitsindependentcompensationconsultant,considersproxydataandsurveydatafromadesignatedgroupofpeercompanies,alongwithsurveydatafromabroadergroupofE&Pcompaniesand,toalesserextent,generalindustrycompanies.
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Withinputfromitsindependentcompensationconsultant,theCommitteeusedthefollowingselectioncriteriatoidentifyourgroupofpeercompanies:
• U.S.Oil&GasE&Pcompanies
• Scaleintermsofenterprisevaluewithadditionalconsiderationgiventoassetsize,marketcapitalization,andrevenue
• Whetherthecompanyisacompetitorforbusiness,investorcapital,orexecutivetalent
• Whetherthecompanyhasasimilarcorporatestructurefocusedonhorizontaldrillingusinghydraulicfracturingtechnologyineithermultiplebasinsorinasinglebasinstrategictoourbusiness
Usingthesecriteria,inNovember2015theCommitteeidentifiedthecompanieslistedbelowasthepeergroupforexecutivecompensationmarketevaluationsfor2016.
Ourmethodologyforselectingpeercompanieshasresultedinincludingsomecompaniesthatarebothsmallerandlargerthanweare.TheCommitteehasdetermineditisimportanttoincludethesecompaniesinthepeergroupbecausewecompetedirectlywiththemforbothbusinessandtalentandbecauseoftheirinfluenceonthemarketforexecutivetalentintheE&Pindustry.
TheCommitteeevaluatesthecompaniescomprisingthepeergroupannuallyandmakeschangesasnecessarytoconfirmWPXisusingtheappropriategroupofcompanies.For2016compensationdecisions,theCommitteedecidedtoreplaceDevonEnergywithWhitingPetroleumbecauseWhiting'senterprisevalueandassetfocusismorecloselyalignedwiththatofWPX.Subsequenttoidentifyingthecompanieslistedabove,SandRidgeEnergy,Inc.wasdelistedbytheNewYorkStockExchange,andUltraPetroleumCorporationfiledforbankruptcyprotection.Asaresult,thepeergroupsetbytheCommitteeforevaluatingperformanceunderthe2016performance-basedRSUsdiffersslightlyfromthepeergroupdescribedabove.See"Performance-Based Restricted Stock Units" belowforalistofpeercompaniesusedforevaluatingperformanceunderthe2016performance-basedRSUs.
Use of Tally Sheets and Wealth Accumulation Analysis
Whenmakingexecutivecompensationdecisions,ourCompensationCommitteereviewscomprehensivetallysheetinformationforeachofourexecutiveofficers.ThesetallysheetsarepreparedbymanagementandreviewedbytheCommittee'sindependentcompensationconsultant.Thetallysheetsquantifytheelementsofeachexecutiveofficer'stotalcompensation,includingtotaloutstandingequityandestimatesofamountsthatwouldbepaidintheeventofachange-in-controlandotherterminationscenarios.
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CabotOil&GasCorporation QEPResources,Inc.ChesapeakeEnergyCorporation RangeResourcesCorporationCimarexEnergyCompany SandRidgeEnergy,Inc.ConchoResourcesInc. SMEnergyCompanyEnergenCorporation SouthwesternEnergyCompanyLaredoPetroleum,Inc. UltraPetroleumCorporationNewfieldExplorationCompany WhitingPetroleumCorporationPioneerNaturalResourcesCompany
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ElementsofourCompensationProgram
Our2016executivecompensationprogramincludedthefollowingfourelements.Eachelementisdesignedtoachieveaspecificobjectivethat,whenbalancedwiththeotherelements,achievesourpay-for-performancephilosophyandalignstheinterestsofourexecutiveswithourstockholders.
Inallocatingamongtheelementsofourcompensationprogram,ourCompensationCommitteeevaluatesmarketdatawhilealsoconsideringourcompensationphilosophy.See"Compensation Philosophy" foradiscussionofhowourCommitteeimplementsthisphilosophy.
Althoughbasesalaryandannualcashincentivesareimportantcomponentsofanexecutiveofficer'stotalcompensation,equityisthemostsignificantelement.FortheCEO,long-termincentivesmakeup75%ofhistargettotaldirectcompensation("TTDC").ForotherNEOs,onaverage,long-termincentivesare67%ofTTDC.
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2016PayMix
Base Salary
Attractingandretainingtalentwithacompetitivebasesalaryisthefirstbuildingblockofourcompensationprogram.Ourbasesalariesareintendedtohelpattracthighlyqualifiedcandidatesandprovideastablesourceofincomesoourexecutiveofficerscanfocusonday-to-dayjobresponsibilities.
OurCompensationCommitteegenerallysetsbasesalarylevelsforourexecutiveofficersinFebruaryofeachyear.BecauseofcontinuedchallengesintheE&Pindustryduetolowcommodityprices,theCommitteemadenochangestothebasesalariesforourexecutiveofficers,exceptforourCFOJ.KevinVann.BecausethecompetitivemarketassessmentrevealedthatMr.Vann'sbasesalaryfellbelowthe25thpercentileofthemarket,theCommitteeapprovedan7.4%basesalaryincreaseforhim,whichbroughthisbasesalarycloserto,butstillbelow,themedianofthepeergroup.WithMr.Vann'sadjustment,basesalariesfor2016were:
TheCommitteeconsidersmarketdatafromourpeergroupaswellasabroadergroupofE&Pcompaniesandgeneralindustrydatawhensettingthebasesalaryforourexecutiveofficers.Theactualbasesalaryforanexecutiveofficermaybeaboveorbelowthetargetmedianbasedonfactorssuchasexperienceinthecurrentandpastpositions,performance,knowledgeandexpertise,andinternalequity.
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CEO OtherNEOs
Executive 2015BaseSalary 2016BaseSalary DollarIncrease PercentIncrease RichardE.Muncrief $ 840,000 $ 840,000 $ 0 0%J.KevinVann $ 426,000 $ 460,000 $ 34,000 7.4%ClayM.Gaspar $ 500,000 $ 500,000 $ 0 0%BryanK.Guderian $ 412,000 $ 412,000 $ 0 0%DennisC.Cameron $ 364,000 $ 364,000 $ 0 0%FormerExecutive
MarciaM.MacLeod* $ 341,000 $ 341,000 $ 0 0%
* Ms.MacLeodservedasSeniorVicePresident—HumanResourcesandAdministrationuntilsheretiredinconnectionwiththeeliminationofherpositiononJuly15,2016.
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Annual Cash Incentive
OurexecutiveofficersareeligibleforcashincentiveseachyearunderourAIP.TheAIPrepresents13%ofourCEO'sTTDCand14%ofTTDCforourotherNEOs.TheAIPisperformance-basedcompensationunderIRCSection162(m)andisdesignedtofocusexecutiveofficersonachievingtheannualbusinessplanlinkedtoourstrategy.Executionagainsttheannualplanisimportanttodrivelonger-termstockholdervaluebycreatingfinancialstrength,managingcosts,andinvestinginprojectsthatwilldeliverfuturevalue.Weemploybalancedperformancemetricstofurtherspecificobjectivesofourstrategy,suchasachievementofplan,costmanagement,cashflow,capitalefficiency,andsafety.
For2016,theCompensationCommitteesettheAIPperformancemetricsasAdjustedEBITDAX,ProductionVolume,DevelopmentEfficiencies,andTotalRecordableIncidenceRate("TRIR")alongwithaDiscretionarycomponent.TRIRwasweightedat10%anddefinedtobe"thenumberofOSHArecordableinjuriesrequiringmedicaltreatmentbeyondsimplefirstaidduringthecalendaryearmultipliedby200,000anddividedbyannualhoursworkedbyWPXemployees."OnMay12,2016,theOccupationalSafetyandHealthAdministration("OSHA")publishedafinalrulestatingthatincentiveprogramsofferingincentivesforzeroaccidentsorlowratesofrecordableinjuriesviolatetherulebecausetheydiscourageemployeesfromreportingincidents.Uponadvicefromlegalcounsel,theCommitteeremovedTRIRfromthe2016incentiveplanandallocatedthe10%weightingpreviously
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assignedtoTRIRtotheDiscretionarycomponent.FollowingthischangeinresponsetotheOSHArule,the2016AIPperformancemetricsandweightingswere:
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Metric Objective Definition Weighting AdjustedEBITDAX
CashFlow
Earningsbeforeinterestexpense,incometaxes,depreciation,depletionandamortization,andexplorationexpenses.Impactfromdiscontinuedoperations,expensesrelatedtotheheadcountreductionsandtheOKCofficeconsolidation,buyoutoffirmtransportationcontracts(post-Piceance),andnon-cashitemssuchasimpairmentsandmark-to-marketmovementsrelatedtocommodityhedgesisremoved. 30%
ProductionVolume
Production Volumesasreportedpubliclyinfinancialresultsbasedonsalesofoil,gas,andnaturalgasliquids 20%
DevelopmentEfficiencies
CapitalEfficiency
Drilling&CompletioncapitaldividedbyEstimatedUltimateRecoveryforwellswithfirstsalesfromJanuary1throughSeptember30,2016 20%
Discretionary(*)
OverallCompanyPerformance
Basedonfactorssuchasperformance-relatedprior-yearreserverevisions,Piceancedivestitureexecution,organizationalrationalization,costinitiatives,maintainingliquidity,andotheritemsthatreflectonoverallWPXperformance 30
%(*)
* TheCommitteeoriginallyadopteda20%weightingfortheDiscretionarycomponent.UponadvicefromlegalcounseltoeliminatetheTRIRmetricinresponsetotheOSHAregulation,the10%weightingpreviouslyassignedtoTRIRwasallocatedtotheDiscretionarycomponent.
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TheCommitteesetthesemetricsfor2016tofocusourNEOsonoutcomesvaluedbythemarket,specificallybalancesheetstrength,liquidity,andgrowth.Changesfrom2015AIPinclude:
• Changedtheweightingfrom30%ProductionVolumeand20%AdjustedEBITDAXto20%ProductionVolumeand30%AdjustedEBITDAXtorecognizeboththatproductionwouldbeimpactedbythecommoditypricesandcapitalspendingwhileweworkedtoimprovemarginsandgrowliquidity
• TocreategreatertransparencyandminimizethecommoditypriceimpactonAIP,"DevelopmentEfficiencies"replacedDrillingFindingandDevelopment.TheDevelopmentEfficienciesmetricincorporatesthedrillingandcompletionscapitalandtheestimatedultimaterecoveryfromthewell.Onlywellswithatleast90daysofproductionwereusedtocalculatethe2016AIPaward.Therefore,wellswithfirstsalesthatoccurredafterSeptember30werenotincludedincalculatingthe2016AIPaward.UsingtheDevelopmentEfficienciesmetric:
• continuestoencourageefficientuseofcapitaldollars
• providesforastrongeralignmenttocapitaldollarsspentoneachwell
• createsincentivestohitproductiongoalsforeachwell
• eliminatestheimpactofotherfactorssuchasfuturedrillingprogramsandlonger-termcommoditypricing
• TheCommitteealsodesignated20%ofthetargetawardas"Discretionary"tohelptoensuretheamountofanycashincentivespaidtoexecutivesreflectsotherfactors,notcoveredbytheothermetrics,thataddtooursuccessornegativelyimpactsstockholders.Thisdiscretionarycomponentfurtherensurestheannualcashincentivesarealignedbothwiththeinterestsofstockholdersandthereturnsstockholdersexperiencethroughouttheyear.TheCommitteeadoptedthismetricwiththerecognitionthattherewereseveralcriticalobjectivesfortheNEOstoaccomplish,suchassuccessfullyclosingthesaleofPiceanceassets,restructuringtheorganizationandreducingheadcounttoreflectasmaller,morefocusedcompany,aligningG&Atobetterreflectthetransformedorganization,andmaintainingliquidity,allofwhicharedifficulttomeasurethroughmoretraditionalmetrics.Asdiscussedabove,followingeliminationofTRIRinresponsetotheOSHArulemaking,theDiscretionarycomponentwasweightedat30%.
InadditiontothisDiscretionarycomponent,theCommitteeretainsdiscretiontoreducethetotalAIPawardifitbelievesdoingsoisinthebestinterestofstockholders.
OurBoardofDirectorsengagesinarigorousprocesseachyearwhensettingtheannualbusinessplan.OurCompensationCommitteethenconsiderstheannualbusinessplanwhensettingtheAIPtargets.Becauseweusedambitiousassumptionswhenwedevelopedthe2016annualbusinessplan,theCompensationCommitteebelievedsettingAIPtargetstotheannualbusinessplanensuredasufficientlevelofdifficultysothatachievingthegoalswouldgeneratestockholdervaluecreation.Theassumptionsintheannualbusinessplanincluded:
• Oiltradingat$40perbarrelandnaturalgastradingat$2.50perMMBtu
• Generalandadministrativeexpensesofonly$175MMwhilethethen-currentrunratewas$225MM
• A25%increaseintheaveragenumberofwellsdrilledin2015
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Thetablebelowshowsthethreshold,target,andmaximumpayoutlevelsforeachperformancemetric,aswellasactualperformanceresultsagainstthethreequantifiablemetrics.
TheCommitteedeterminedtheactualAIPawardstobepaidtotheNEOsbasedon:
• performanceagainsttargetsforthethreeformulaicperformancemetricsinthetableabove
• theCommittee'sassessmentoftheCompany'soverallperformanceandattainmentofcriticalobjectivesasreflectedintheDiscretionarymetric(see below)
• individualperformanceofeachexecutive,thoughnoadjustmentsforindividualperformanceweremadein2016
InevaluatingtheperformanceoftheNEOsinordertosettheawardpayoutpercentagefortheDiscretionarycomponent,theCommitteeconsideredfinancialandoperationalaccomplishmentsduringtheyear.Highlightsoftheseaccomplishmentsinclude:
• RaisedEURinthePermianby34%andWillistonby13%
• Increasedliquiditytoapproximately$1.5billion
• Successfullynavigatedthroughchallengescreatedbylowcommoditypricesinthefirstquarterof2016
• CompletedthePiceancedivestitureandeliminatedthePiceancetransportobligations
• Continuedorganizationalchangestotransformthecompanyandbemoreefficientandnimblemovingforward
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PerformanceMetric Weighting Threshold(1) Target(1) Maximum(1) ReportedResults
AttainmentResults
AttainmentAgainstTarget
AwardPayout(3)
AdjustedEBITDAX($Million) 30% $ 389 $ 458 $ 527 $ 475 $ 499(2) 108.9% 40.2%%ofTarget 85% 100% 115% ProductionVolume(MBoe/d) 20% 67.0 74.5 85.7 84.6 84.6 113.6% 32.8%%ofTarget 90% 100% 115% DevelopmentEfficiencies 20% 12.33 10.72 8.04 7.30 7.30 146.8% 40%%ofTarget 85% 100% 125% Discretionary 30% NA NA NA NA NA NA 52%(4)%ofTarget NA NA NA AwardPayout%* 50% 100% 200% 165%
(1) Thereisnopayoutforperformancefallingbelowthethresholdlevel.Thepayoutopportunityforperformancewithintherangesisdeterminedbaseduponlinearinterpolation.UnderMr.Muncrief'semploymentagreement,whichexpiresin2017,hismaximumpayoutopportunityis250%.
(2) TheAttainmentResultsforAdjustedEBITDAXvaryfromReportedResultsduetoadjustmentsforitemssuchasseveranceandrelocationexpensesandotheritemsincludedinthedefinitionofAdjustedEBITDAXasdescribedinthetableonthepriorpage.
(3) TheactualawardwasadjusteddownwardtoeliminatetheimpactofresumingcompletionsoftheDUCsintheWillistonbasinbecausethesewerenotincludedinthebaseplanuponwhichtheoriginalmetricswerebased.Withoutthisdownwardadjustment,thepayoutwouldresultinawindfallbyreflectingresultsofcapitalexpendituresnotintheannualbusinessplan.
(4) TheCompensationCommitteesettheDiscretionarycomponentbaseduponitsassessmentofanumberofperformancefactorscontributingtooursuccessin2016.Seebelowfordetails.
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Baseduponthesefactors,theCommitteeapprovedthefollowing2016AIPawardpayoutstotheNEOs.
Long-Term Incentives
Althoughwetypicallymakeanannualequitygrantinthefirstquarter,wedelayedthe2016annualequitygrantuntilMay19duetothemarketvalueofourcommonstockearlyintheyear,thecontinuinguncertaintiesinthebroaderE&Pmarket,andtheimpactofthereorganizationduringthefirsthalfoftheyear,whichincludedlayoffs.Duringthefirsttwomonthsof2016,ourclosingstockpricewasinthe$4to$5rangeandhita52-weeklowof$2.53onJanuary20,2016.Tohelplessentheimpactofourstockpricevolatilitywhendeterminingthenumberofsharestobegranted,wehaveinthepastuseda20-dayaverageclosingpriceofourstockpriortothegrantanddividedthataverageintotheintendedequityvalueforeachNEOtodeterminethenumberofsharestobegranted.AlthoughtheCompensationCommitteebelievesusinga20-dayaveragepricetodetermineanequitygrantisanappropriatestandardpractice,giventhelowstockpriceinthefirstquarter,weusedafixed$9priceforsizingthe2016annualemployeeequitygrant.TheCommitteedeterminedthistobeareasonablepricebaseduponpricetargetssetatthetimebyanumberofanalystswithBuyrecommendationsforourcommonstockrangingfrom$7to$11,withanaveragetargetpriceof$9.03.WhenManagementbeganplanningforthisgrant,thestockwastradinginthe$7range.
If,consistentwithpastpractice,theannualequitygranthadbeenmadeonFebruary29basedonthe20-dayaveragestockpriceatthattimeof$4.51,itwouldhaveresultedintheissuanceof2,720,614totalsharestoourNEOsand3,540,119totalsharestoallemployeesreceivingtheannualgrant.Instead,usinga$9priceresultedinagrantof1,032,216totalsharestoourNEOsand1,997,148totalsharestoallemployeesreceivingtheannualgrant,resultinginlessdilutiontoourshareholdersandprovidingemployeeswithagrantthatbetterreflectedthevalueoftheCompany.
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Executive TargetPercentage
(%ofEligibleEarnings) TargetAward
Value(1) ActualAward
Paid(1) RichardE.Muncrief 110%$ 924,000 $ 1,524,600J.KevinVann 80%$ 362,769 $ 598,570ClayM.Gaspar 80%$ 400,000 $ 660,000BryanK.Guderian 70%$ 288,400 $ 475,860DennisC.Cameron 65%$ 236,600 $ 390,390FormerExecutive
MarciaM.MacLeod 60%$ 204,600 $ 188,271(2)
(1) Thetargetawardvalueandactualawardpaidarebasedonactualeligibleearningsfortheyear.Theterm"EligibleEarnings"includesregularbasepay,holidaypay,andpaidtimeoffearnedduringtheyear.
(2) BecauseMs.MacLeoddidnotworktheentireyear,theactualawardpayoutwaslessthanthetargetawardvalueduetoreducedEligibleEarnings.
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ShareSavingsResultingfromDelayedEquityGrant
TheannualequitygranttoourNEOsincludedperformance-basedRSUsandtime-basedRSAs.Theseequityvehiclesmeetanumberofbusinessobjectives,includingretention,aligninginterestsofNEOswiththeinterestsofstockholders,andencouragingperformancethatleadstostockpriceappreciationandthecreationofstockholdervalueoverthelong-term.
TheCommitteesetstargetsforequitycompensationbasedonmarketdatafromourpeergroupandinternalequityconsiderationssuchasrelativescopeofresponsibilitiesofeachposition.Basedonthesefactors,for2016theCommitteesetthefollowingequitytargetsforourNEOs.
Basedonbothmarketdataandourobjectivetodeliveramaterialproportionofequitycompensationintheformofperformance-basedincentives,theCommitteesetthefollowingequityallocationforourNEOs.
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Executive Performance-Based
RSUs(1) Time-BasedRSAs 2016EquityTarget RichardE.Muncrief $ 3,240,000 $ 2,160,000 $ 5,400,000J.KevinVann(2) $ 800,000 $ 1,200,000 $ 2,000,000ClayM.Gaspar $ 1,000,000 $ 1,500,000 $ 2,500,000BryanK.Guderian $ 400,000 $ 600,000 $ 1,000,000DennisC.Cameron $ 300,000 $ 450,000 $ 750,000FormerExecutive
MarciaM.MacLeod(3) $ 0 $ 0 $ 0
(1) Toarriveattheresultingnumberofperformance-basedRSUsandtime-basedRSAsawarded,thedollarvalueoftheapprovedawardwasdividedby$9.Thestockpriceonthedateofgrantwas$9.75,asreflectedinboththeSummaryCompensationTableandthe2016GrantsofPlan-BasedAwards.
(2) BecausethecompetitivemarketassessmentrevealedthatMr.Vann'sbaseequitytargetfellbelowthe25thpercentileofthemarket,theCommitteeapprovedanincreaseinhisequitytargetfrom$1,500,000to$2,000,000,whichrepresentsa33%increase.Althoughthisincreaseissignificant,evenaftertheincrease,hisequitytargetremainedbelowthe50thpercentileofthemarket.
(3) Becauseofherpendingretirement,Ms.MacLeoddidnotreceiveanannualequitygrantin2016.
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EquityMixofthe2016AnnualGrant
Webelieveitisimportantthatamaterialportionofgrantstoallexecutiveofficersbeintheformofperformance-basedequity.Further,wehavegrantedahigherproportionofperformance-basedRSUstotheCEOthantotheotherexecutiveofficerstomoredirectlyaligntheinterestsoftheCEOwithourstockholders.
Performance-Based Restricted Stock Units
Wegrantourexecutiveofficersperformance-basedRSUstofocustheireffortsonlong-termperformance.AlthoughtheperformanceperiodforthoseRSUsistypicallythreeyears,forthe2016grant,whichwasnotmadeuntilMay19,theperformanceperiodrunsfor33monthsfromApril1,2016,throughDecember31,2018.TheperformancemetricisrelativeTSR,ascomparedtoagroupofourpeercompanies,furtherstrengtheningthealignmentwithstockholders.ThecompaniesusedforevaluatingrelativeTSRforthe2016awardare:
See"Competitive Positioning" aboveforadiscussionofhowweselectpeercompanies.TSRiscalculatedasfollows:
RelativeTSRassessesthestrengthofourreturntostockholdersbycomparingittotheTSRofourpeercompanies.UsingrelativeTSRasthelong-termperformancemetric,therefore,causesourexecutiveofficerstofocusonexecutingourstrategyandcreatingvalueforstockholders,evenineconomicdowntimes.Itminimizestheimpactofshort-andmid-termmovementsinshareprice,causingexecutiveofficerstofocusonenhancingvalueoverthelong-term.Additionally,relativeTSRfocusesourexecutiveofficersonoutperformingourcompetitorsbecauseitlinkstheirpaytohowourstockpricecomparestothestockpriceofourpeercompanies.Webelieverewardingexecutiveofficersforachievingresultswithintheircontrolandincentingthemtofocusonoutperformingourcompetitorswillleadtoincreasedstockholdervalue.
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CabotOil&GasCorporation NewfieldExplorationCompanyChesapeakeEnergyCorporation PioneerNaturalResourcesCompanyCimarexResourcesCompany QEPResources,Inc.ConchoResourcesInc. RangeResourcesCorporationEnergenCorporation SMEnergyCompanyEPEnergyCorporation SouthwesternEnergyCompanyLaredoPetroleum,Inc. WhitingPetroleumCorporation
TSR% = (Stockpriceaverageoverthequarterattheendofperiod–Stockpriceaverageoverthequarterimmediatelypriortostartofperiod+Dividendspaid)
Stockpriceaverageoverthequarterimmediatelypriortostartofperiod
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Atthebeginningoftheperformanceperiod,theCompensationCommitteeestablishestheperformanceobjectiveandapprovesgrantstoourexecutiveofficersofacertainnumberofRSUsbasedontheirindividualequitytargetandtheequitymixdescribedabovein"Long-Term Incentives ."Attheendofthethree-yearperformanceperiod,theCommitteedeterminesthepayoutpercentagefortheperformance-basedRSUsbasedonourrelativeTSRduringthatperformanceperiod.Ourexecutiveofficershavetheopportunitytoreceivefrom0%to200%oftheawardgrantedbasedonhowourTSRcomparestothepeergroupattheendoftheperformanceperiod.
RegardlessofwhereourTSRfallsrelativetothepeercompanies,payoutiscappedat100%ifourabsoluteTSRisnegativeoverthethree-yearperformanceperiod.Performanceatthefirstandsecondrankingsrelativetopeersearnsa200%payoutwhenabsoluteTSRispositive.
TSRPerformance
Becausewesetourequitygrantvaluesbasedoncompetitivemarketdata,theperformance-basedequityawardsaredesignedtopayoutat100%oftargetformedianpeergroupperformancewithhigherperformanceresultinginawardsabovetheequitytargetandlowerperformanceresultinginawardsbelowthetargetvalue.Asaresult,whenweperformbetterthanthemajorityofthecompaniesinourpeergroup,ourexecutiveofficersearnanawardabovethetargetvalueatthetimeofgrant.Conversely,whenourTSRisinthebottomhalfofourpeergroup,ourexecutiveofficersearnlessthanthetargetawardvalue.
Vesting of 2014 Performance-Based RSUs
In2014,wegrantedperformance-basedRSUstoourexecutiveofficers,includingthreeofourcurrentNEOs.Underthetermsofthegrant,TSRrelativetothepeergroupdesignatedatthetimeofgrantwastheperformancemetric.Thethree-yearperformanceperiodendedonDecember31,2016.ThecumulativeabsoluteTSRoverthethree-yearperformanceperiodwasnegative23.76%,andperformancerelativetoour15peercompanieswasinthe64thpercentile,orinthesecondquartileofthepeergroup.BaseduponthepayoutrangesetbyourCompensationCommitteeatthetimeofthegrant,thepayoutfortheseRSUswouldhavebeen150%.However,becauseabsoluteTSRwasnegative,thepayoutwascappedat100%.Webelievetheseawardsoperatedasintendedbylinkingtheperformanceourexecutivesdelivertothepaytheyreceive.Specifically,executiveswererewardedforrelativelystrongperformanceagainstthepeergroup,butthepayoutwaslimitedto100%duetonegativeabsoluteTSRoverthethree-yearperiod.
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ThepeergroupformeasuringourrelativeTSRforthe2014performance-basedRSUswascomprisedof:
Thefollowingtablesummarizesthepayoutofthe2014performance-basedRSUs.
Time-Based Restricted Stock Awards
Wegranttime-basedRSAstopromotelong-termretentionofexecutiveofficersandpermitthemtoaccumulateequityownershipintheCompanysotheinterestsofourmanagementteamaredirectlyalignedwiththeinterestsofourstockholders.Webelieveitisimportanttohaveanelementofcompensationthatisfocuseddirectlyonretainingtalentsowecanminimizepotentiallossofinstitutionalknowledgeandthedisruptioninherentinunplannedturnover.Time-basedRSAsalsoalignourexecutiveofficerswithourstockholdersbymakingthemstockholdersthemselvesandtyingtheirpersonal,long-termwealthtothesuccessoftheCompany.Retainingtalentandaligninginterests
42
CabotOil&GasCorporation PioneerNaturalResourcesCompanyChesapeakeEnergyCorporation QEPResources,Inc.CimarexEnergyCompany RangeResourcesCorporationDevonEnergyCorporation SandRidgeEnergy,Inc.EOGResources,Inc. SMEnergyCompanyForestOilCorporation* SouthwesternEnergyCompanyNewfieldExplorationCompany UltraPetroleumCorporationNobleEnergy,Inc.
* ForestOil,whichcompletedanall-stockbusinesscombinationwithSabineOil&GasonDecember16,2014,wasincludedinthegroupofcomparatorcompaniessetbyourCompensationCommitteeatthetimeofthegrant.Asaresultofthisbusinesscombination,theshareholderreturnforForestwaslockedinasofitsDecember16,2014,closingstockpriceof$0.27pershare.
Executive PBRSUsGranted
GrantDayValue
#ofPBRSUsForfeited(0%)
PBRSUsVestingBased
UponPerformanceAttainment(100%)
TotalValueReceivedBased
UponPerformance
AttainmentandVestingDateStockPrice
TotalValueLostBasedUponStock
PriceDepreciation(4)
RichardE.Muncrief(1) NA NA NA NA NA NAJ.KevinVann(2) 5,621 $ 99,717 0 5,621 $ 72,286 $ 27,431ClayM.Gaspar(1) NA NA NA NA NA NABryanK.Guderian 24,041 $ 426,487 0 24,041 $ 309,167 $ 117,320DennisC.Cameron(2) 15,025 $ 266,544 0 15,025 $ 193,222 $ 73,322FormerExecutive
MarciaM.MacLeod(3) 10,518 $ 186,589 2,338 8,180 $ 105,195 $ 81,394
(1) Messrs.MuncriefandGasparwerenotemployedatthetimeofthisgrant.
(2) ThegrantstoMessrs.VannandCameronweremadebeforetheirpromotionsandbasedupontheirpriorrolesasvice-presidents.
(3) Underthetermsofthegrant,Ms.MacLeod'ssharesareproratedforthetimesheworkedpriortoherretirement.
(4) Basedupongrant-datevalueof$17.47onMarch3,2014,andclosingpriceof$12.86onthevestingdate.
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encouragesourexecutiveofficerstotakeactionstoenhancethevalueofourbusinessandincreasestockholdervalue.Time-basedRSAsvestratablyoverathree-yearperiod.
Benefits and Limited Perquisites
Weprovidecompetitivebenefitstoallouremployees,includingourexecutiveofficers,topromotehealthandfinancialwell-being.Thesebenefitsincludehealth,life,anddisabilityinsurance.Long-termdisabilitycoverageisprovidedatabaselevelof60%ofbasesalary,withamaximumof$15,000permonth.Inaddition,allemployees,includingourexecutiveofficers,areeligibletopurchasesupplementallong-termdisabilitycoveragebringingthetotalupto70%ofbasesalary,withacombinedmaximumbenefitof$15,000permonth.
Ourretirementprogramconsistsofbothaqualified401(k)definedcontributionplanandtwononqualifieddeferredcompensationplans.Underthequalified401(k)plan,theCompanymatchesemployeecontributionsdollar-for-dollarupto6%ofpay,subjecttoInternalRevenueCode("IRC")contributionlimits,andalsomakesanadditionalcontributiontoallemployeesofeither6%or8%ofeligiblepay,dependingontheemployee'sage.
Thetwononqualifiedplansarearestorationplanandavoluntarydeferralplan.Therestorationplanprovidesbenefitsequaltotheamountthatwouldbepayableunderthequalified401(k)planintheabsenceofcertainlimitationsoftheIRC.Ourexecutiveofficersalsoareeligibletoparticipateinavoluntarynonqualifieddeferredcompensationplan,whichallowsdeferralofupto75%ofbasesalaryandupto100%ofannualcashincentives.Deferralstothenonqualifieddeferredcompensationplanarematchedupto6%ofpaythatisnotrecognizedwithinthequalified401(k)plan.
Wealsoprovidethefollowinglimitedperquisitestoourexecutiveofficerswithanaimofattractinghighlyqualifiedcandidatesandallowingourexecutiveofficerstofocusonjobresponsibilities:
• Financial Planning Reimbursement. WereimburseNEOsforfinancialplanningtoprovidethemwithexpertiseoncurrenttaxlaws,personalfinancialplanning,andpreparationsforcontingenciessuchasdeathanddisability.WebelieveencouraginganNEOtoworkwithafinancialplannermaximizestheretentionandengagementaspectsofthedollarswespendontheseprograms.Thefinancialplanningreimbursementislimitedto$7,500annually.
• Personal Use of WPX Energy's Company Aircraft. WeprovideverylimitedpersonaluseofCompanyaircraftattheCEO'sdiscretion.TheprimarypurposeofourCompanyaircraftisforbusinessuse,buttheCEOretainsdiscretiontopermitpersonalusewhenhedeemsappropriate,suchaswhencommercialairtravelisinefficientduetocostsoradditionaltraveltimebecausethedestinationisnotwellservedbycommercialairlines,orforpersonalemergencies.During2016,themaximumindividualamountofpersonalaircraftusagebyanyofourNEOswas$44,233.
• Executive Physicals. Executiveofficerphysicalsalignwithourwellnessinitiativeaswellasassistusinmitigatingrisk.Thesephysicalsreducevacancysuccessionriskbyhelpingtheexecutiveidentifyandpreventissuesthatcouldleavearoleunexpectedlyvacated.
OtherCompensationPractices
Stock Ownership Guidelines
Itisimportantfortheinterestsofourexecutiveofficerstobealignedwiththoseofourstockholders.OnewayweaccomplishthisisbyrequiringourexecutiveofficerstoholdcertainlevelsofWPXstockunderstockownershipguidelinesadoptedbyourBoardofDirectorsandmonitoredbyourCompensationCommittee.
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ThesestockownershipguidelinesdefinetheminimumlevelsofWPXstockourexecutiveofficersmustown.Eachexecutiveofficermustholdcommonstockortime-basedRSUsorRSAsofWPXwithavalueatleastequaltothefollowingmultipleofhisorherbasesalaryineffectasofDecember31oftheprioryear.
Stockoptions,whethervestedornot,areexcludedfromthenumberofsharesownedincalculatingcompliancewiththeseguidelines.Unvestedtime-basedRSUsandRSAscounttowardsatisfactionoftheownershiprequirementswhileunvestedperformance-basedRSUsdonot.
If,ontheannualcompliancedateofFebruary1,anexecutiveofficerdoesnotownsharesofWPXcommonstockwithavalueequaltotherequiredmultipleofbasesalary,thatexecutiveofficerisrequiredtoretain50%ofanyWPXequityacquiredthroughtheexerciseofstockoptionsorthevestingoftime-basedRSUsorRSAsorperformance-basedRSUs,netoftaxes,untilthenextcompliancedatewhenhisorherWPXstockownershipmeetstherequiredmultipleofbasesalary.
Tofurtheralignhisinterestswithstockholders,ourCEOMr.Muncriefmadeopenmarketpurchasestotaling124,000sharesbetweenthetimehejoinedtheCompanyinMay2014andtheendof2015.Inaddition,hepurchased20,400sharesofourstockonJune6,2016,inourpublicequityoffering.
Consideration of Risk in Setting Executive Compensation
Ourperformancemanagementsystemevaluatesallemployees,includingourexecutiveofficers,notonlyonresultsbutalsoonhowresultsareachieved.Inotherwords,wewillnotseekresultsatallcosts.Achievingresultsinawaythatisconsistentwithourvaluesisanimportantpartofourculture.Thiscultureisoneofthewaysweareabletosetaggressiveperformancegoalsandencourageappropriateandresponsiblerisk-takingwhilediscouragingimprudentrisks.OurCompensationCommitteehasdiscretiontoadjustindividualannualincentiveawardsbasedonanevaluationofhowexecutiveofficersachieveresults,includingtheavoidanceofunduerisks.
TheCommitteealsomitigatesriskbyusingbalancedperformancemetrics.Forexample,ourannualcashincentiveprogrammeasuresAdjustedEBITDAXandDevelopmentEfficienciesaswellasProductionVolume.Togetherthesemetricsencourageourexecutiveofficerstomakedecisionsthatgrowstockholdervalueoverthelongterm.Inaddition,theDiscretionarycomponentallowstheCommitteetoevaluateotherfactorstoassurethatinpursuingannualperformanceobjectivesourexecutiveofficersalsofocusonultimatevaluecreation,sustainabilityofperformance,andsafety.
WhiletheCommitteebelievesitisimportanttoemphasizepay-for-performanceinourexecutivecompensationprogram,italsorecognizestheneedtobalancefixedpaywithvariablepayandshort-termincentiveswithlong-termincentivestoavoidplacingtoomuchemphasisonshort-termresults.Alackofbalancebetweenannualincentivesandlong-termincentivescouldcauseourexecutiveofficerstotakeundueriskswhenseekingtodriveshort-termperformance.Inaddition,theCommitteeretainsdiscretioninbothourannualincentiveprogramandourlong-termincentiveprogramtoadjustabove-targetpayoutsdownwardforanyreason,includingexcessivelyriskybehavior.
Ourexecutivecompensationprogramincludesseveralfeaturesdesignedtolimitunduerisks.Forexample,thereiscaponpayoutsunderbothourshort-andlong-termincentiveplans.TheCommitteehasadoptedstockownershipguidelinestoalignourexecutiveswithshareholdersandarecoupmentpolicytoremovetheincentivetoinflateperformance-basedawards.Inaddition,ourBoardofDirectorshasadoptedanti-hedgingandanti-pledgingpolicies.Annually,weconductanenterprise-wide
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ExecutiveLevel MultipleofBaseSalary CEO 6OtherExecutiveOfficers 3
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assessmentofmaterialrisksassociatedwithourpolicies,programs,andactionsrelatedtohumancapital,includinganyrisksthatmightberaisedbyourcompensationprograms.TheCommitteereviewsthisriskassessmenteachyear.
Recoupment Policy
Intheeventourfinancialresultsaresignificantlyrestatedduetofraudorintentionalmisconduct,ourBoardofDirectorswillreviewanyperformance-basedincentivepaymentspaidtoexecutiveofficers.Wewill,totheextentpermittedbyapplicablelaw,seekrecoupmentofallperformance-basedincentivepaymentsfromanyexecutiveofficerfoundbytheBoardofDirectorstobepersonallyresponsibleforthefraudorintentionalmisconductthatcausedtheneedfortherestatement.Inaddition,wewillseekrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults.
OurCompensationCommitteehastakenactiontoclarifythatourrecoupmentpolicywillbeinterpretedandappliedasnecessarytocomplywithSECandstockexchangerequirements.TheCommitteewillreviewourrecoupmentpolicyandreviseittocomplywiththerulesoncetheyarefinalized.
Anti-Hedging and Anti-Pledging Policies
SECrulesgenerallyprohibituncoveredshortsalesofourcommonstockbyourexecutiveofficers.Ourinsidertradingpolicyalsoprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesbyourexecutiveofficers.Thepolicyalsorequiresallemployeescoveredbythepolicy,includingourexecutiveofficers,toconsultwithourCorporateSecretary(orwithourGeneralCounselorChiefFinancialOfficerifourCorporateSecretaryisnotavailable)beforetheyengageinanytransactionforthepurchaseorsaleofoursecurities.Ourinsidertradingpolicyalsoprohibitsholdingourcommonstockinamarginaccountorpledgingourcommonstockascollateralforaloan.
Employment Agreements
Itisnotourtypicalpracticetoenterintoemploymentagreements.InconnectionwiththerecruitmentandhiringofourCEO,however,weenteredintoathree-yearemploymentagreementwithMr.Muncrief.Thisemploymentagreementdoesnotincludeanevergreenprovisionandislimitedintermtothreeyears,terminatingonMay15,2017.Undertheemploymentagreement,Mr.Muncriefwouldbeentitledtothefollowingcompensationuponterminationofhisemployment(inadditiontoanyvestingofhisequityawardsundertheapplicableawardagreements):
• IftheCompanyterminatesMr.Muncriefwithoutcause,hewillbeentitledtoacashpaymentequaltotwotimeshisannualbasesalaryandtargetbonus,aswellasapro-ratedpaymentundertheAIPfortheyearinwhichheisterminated.
• IntheeventofMr.Muncrief'sdeathordisability,heorhisestatewillbeentitledtoapro-ratedpaymentundertheAIPfortheyearinwhichdeathordisabilityoccurs.
Termination and Severance Arrangements
Ourexecutiveseverancepayplanincludesexecutiveofficers,otherthantheCEOwhocurrentlyhasanemploymentagreement.AnexecutiveofficermayparticipateintheplanwhentheCEOapprovesareductioninforce,ajobelimination,oraninvoluntaryterminationwithoutcause.Theamountofseverancepayisdeterminedbymultiplyingtheseveredexecutiveofficer'sannualbasesalaryandaverageannualincentive(basedupontheexecutiveofficer'sactualincentivesearnedoverthepriorthreeyears)by1.5.Inaddition,theseverancepayplanprovidesalumpsumpaymentequalto12monthsoftheseveredexecutiveofficer'smedicalplancoverage.Thepurposeofthislumpsum
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paymentistoprovidethefinancialequivalentofCOBRAmedicalplanratesfor12monthsofmedicalcoverageunderCOBRA.Consistentwithourpastpractice,theseverancepayplanprovidesthatthetreatmentofoutstandingequityawardsisgovernedbythetermsofthegrantagreementissuedatthetimetheequitywasgranted.Ingeneral,ourequityawardagreementsprovideforeithervestingorpro-ratedvestingforseveredemployees.Toparticipateintheplan,theemployeemustexecuteaseveranceandrestrictivecovenantagreementwhichmaycontain,amongotherprovisions,non-competitionandnon-solicitationcovenants.
OurCEOisnotcoveredbytheexecutiveseverancepayplanandinsteadissubjecttoanemploymentagreement.See"Employment Agreements "abovefordetailsofthecompensationourCEOwouldbeentitledtouponterminationofhisemployment.
Inconnectionwiththeterminationofheremployment,weenteredintoaSeveranceandRestrictiveCovenantAgreementwithMs.MacLeod.Thisagreementprovidedforseverancebenefitsunderourexecutiveseverancepayplan.Inadditiontotheseverancepaycalculatedasdescribedabove,Ms.MacLeodalsoreceivedacashpaymentof$650,000.TheCompensationCommitteeapprovedthisadditionalpaymentbecauseMs.MacLeoddidnotreceivea2016annualequitygrant.TheelementsofMs.MacLeod'sseverancepaymentarereflectedinthetablesfollowingtheCD&A.
Change-in-Control
EachofourNEOsispartytoanindividualchange-in-controlagreement.Ourchange-in-controlagreements,inconjunctionwiththeNEOs'RSU,RSA,andstockoptionagreements,provideseparationbenefitsfortheNEOsintheeventofachange-in-controlandaredesignedtoencourageNEOstofocusonthebestinterestsofourstockholdersbyalleviatingconcernsaboutapossibledetrimentalimpacttotheirowncompensationunderapotentialchange-in-control.Ourprogramincludesadoubletriggerforcashpayments,benefits,andequityvesting.Thismeanstheremustbeachange-in-controlandtheNEO'semploymentmustbeinvoluntarilyterminatedbythesuccessorcompanyortheNEOmusthaveterminatedhisorheremploymentforgoodreasoninorderforbenefitstobetriggeredundertheagreement.Whileadoubletriggerforequityisnotthecompetitivenormofourpeergroup,thispracticeprovidesabetterbalancebycreatingsecurityfortheNEOswithoutcreatinganincentiveforNEOstoleaveimmediatelyafterachange-in-control.Ouragreementsdonotcontainanexcisetaxgross-upprovision,butinsteadprovidea"bestnet"provisionprovidingNEOswiththegreateroftheirafter-taxbenefitcappedatthesafeharboramountortheirbenefitpaidinfull(subjectingthemtopossibleexcisetaxpayments).
OurCompensationCommitteereviewsourchange-in-controlbenefitsperiodicallytoevaluatewhethertheyareconsistentwithcompetitivepracticeandalignedwithourcompensationphilosophy.Aspartofthesereviews,calculationsareperformedtodeterminetheoverallprogramcostifachange-in-controleventweretooccurandallcoveredNEOswereterminated.Anassessmentofcompetitivenorms,includingthereasonablenessofthetypesandamountofcompensationreceived,isusedtovalidatebenefitlevelsforachange-in-control.OurCompensationCommitteebelievesthatofferingachange-in-controlprogramisappropriateandcriticaltoretainingandattractingexecutivetalentandkeepingthemalignedwiththeinterestsofourstockholdersiftherewasachange-in-control.
ThefollowingchartdetailsthebenefitsreceivedifanNEOweretobeterminatedorresignedforadefinedgoodreasonfollowingachange-in-controlaswellasananalysisofthosebenefitsasitrelates
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totheCompany,stockholders,andtheNEOs.See"Change-in-Control Agreements" belowforfurtherdisclosureofourchange-in-controlprogram.
Accounting and Tax Treatment
OurCompensationCommitteeconsiderstheimpactofaccountingandtaxtreatmentwhendesigningallaspectsofpay,buttheprimarydriverofourprogramdesignistosupportourbusinessobjectives.
Section162(m)oftheIRClimitstheamountofcompensationwemaydeductonourfederalincometaxreturnforcompensationpaidtocertainexecutiveofficersto$1millionperyear.Thereareexceptionstothe$1millionlimitationforperformance-basedcompensationmeetingcertainrequirements.Boththelong-termperformance-basedequityincentiveandtheannualcashincentivearedesignedtomeetthedefinitionofperformance-basedcompensationunderSection162(m)inordertoqualifyfortheperformance-basedexceptiontothe$1milliondeductionlimit.WhiletheCommitteeattemptstopreservethedeductibilityofcompensationpaidtoexecutiveofficers,itdoesnotlimitexecutivecompensationtoamountsdeductibleunderSection162(m)inordertoretainflexibilityindeterminingtheamountstobepaidforincentivecompensation.
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Change-in-ControlBenefit BenefittoWPXandStockholders BenefittoExecutiveOfficerMultipleofbasesalaryplusannualcashincentiveattarget
Encouragesexecutiveofficerstoremainengagedandstayfocusedonsuccessfullyclosingthetransaction
Financialsecurityfortheexecutiveofficerequivalenttotwoyearsofcontinuedemployment(threeyearsforourCEO)
Acceleratedvestingofequityawards Anincentivetostayduringandafterachange-in-controlIfthereisriskofforfeiture,executiveofficersmaybelessinclinedtostayortosupportthetransaction
Theexecutiveofficersarekeptwhole,iftheyhaveaseparationfromservicefollowingachange-in-control
Cashpaymentof18monthsofCOBRAhealthcoverage(ifenrolledincoverageattimeoftermination)
AminimalcosttotheCompanythatcreatesacompetitivebenefit
Coverssomeofthecostofcontinuinghealthcoverage
Reimbursementoflegalfeestoenforcebenefit
KeepsexecutiveofficersfocusedonWPXandnotconcernedaboutwhethertheacquiringcompanywillhonorcommitmentsafterachange-in-control
Securityduringanuncertaintimeperiod
Outplacementassistance Keepsexecutiveofficersfocusedonsupportingthetransactionandlessconcernedabouttryingtosecureanotherposition
Assistsexecutiveofficersinfindingacomparableexecutiveposition
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2016SummaryCompensationTable
ThefollowingtablesetsforthcertaininformationwithrespecttothecompensationoftheNEOsearnedduringfiscalyears2016,2015,and2014.
48
ExecutiveandPrincipalPosition Year Salary(1) Bonus
StockAwards(2)
OptionAwards(3)
Non-EquityIncentivePlanCompensation(4)
ChangeinPensionValue
andNonqualifiedDeferred
CompensationEarnings(5)
AllOtherCompensation(6) Total
RichardE.Muncrief 2016 $ 840,000 $ 0 $ 5,850,000 $ 0 $ 1,524,600 $ 0 $ 353,371 $ 8,567,346Chairmanofthe 2015 815,385 0 4,615,699 0 1,345,385 0 268,707 7,045,176Board,Presidentand 2014 498,462 0 14,833,039(8) 1,224,998 960,000 0 56,150 17,572,649ChiefExecutiveOfficer
J.KevinVann 2016 453,461 0 2,167,000 0 598,569 0 117,344 3,336,374SeniorVicePresident 2015 406,923 0 1,357,559 0 488,308 0 79,784 2,332,574andChiefFinancialOfficer 2014 358,304 0 961,850 371,487 271,624 0 63,282 2,026,547
ClayM.Gaspar 2016 500,000 0 2,708,326 0 660,000 0 158,229 4,026,555SeniorVicePresident 2015 459,769 0 2,357,556 0 551,723 0 140,185 3,509,233andChiefOperatingOfficer 2014 77,885 0 3,999,994(8) 0 432,000 0 13,540 4,523,419
BryanK.Guderian 2016 412,000 0 1,083,323 0 475,860 0 98,448 2,069,631SeniorVicePresident 2015 404,615 0 1,086,047 0 424,846 0 90,398 2,005,906ofBusinessDevelopment 2014 394,769 0 899,984 300,044 331,606 0 81,053 2,007,456
DennisC.Cameron 2016 357,000 0 812,497 0 390,390 0 91,564 1,651,451SeniorVicePresident 2015 355,385 0 678,779 0 346,500 0 78,171 1,458,835andGeneralCounsel 2014 348,750 0 562,481 187,520 272,025 0 61,766 1,432,542FormerExecutive:
MarciaM.MacLeod 2016 190,172 0 0 0 188,271 0 1,590,248 1,968,691SeniorVicePresidentof HRandAdministration(7)
(1) Salary:Actualsalarypaidmaydifferfromtheannualrateduetothenumberofpayperiodsduringtheyearandtheeffectivedateofsalaryincreases.
(2) StockAwards:2016awardsweregrantedunderthetermsofWPXEnergy,Inc.,2013IncentivePlanandincludetime-basedRSAsandperformance-basedRSUs.AmountsshownforallyearsarethegrantdatefairvalueoftheawardscomputedinaccordancewithFASBASC.
2016Performance-BasedRSUMaximumPotential
Executive MaximumAward
MaximumAwardValueBasedon
12/30/2016ClosingStockPrice
RichardE.Muncrief $ 7,020,000 $ 10,490,400J.KevinVann $ 1,733,316 $ 2,590,196ClayM.Gaspar $ 2,166,665 $ 3,237,775BryanK.Guderian $ 866,658 $ 1,295,098DennisC.Cameron $ 649,994 $ 971,324FormerExecutive
MarciaM.MacLeod $ 0 $ 0
(3) OptionAwards:2014awardsaregrantedunderthetermsoftheWPXEnergy,Inc.,2013IncentivePlanandincludenonqualifiedstockoptions.AmountsshownarethegrantdatefairvalueofawardscomputedinaccordancewithFASBASCTopic718.TheassumptionsusedtovaluetheoptionawardscanbefoundinWPX'sAnnualReportonForm10-Kfortheyear-endDecember31,2014.
(4) Non-EquityIncentivePlanCompensation:UndertheAIP,themaximumannualincentivefundingforNEOsis200%oftargetexceptfortheCEO,whichis250%.
(5) ChangeinPensionValueandNonqualifiedDeferredCompensationEarnings:WPXdoesnotsponsorapensionplan.Allinvestmentsareinorbasedonmutualfundsorotherpubliclyavailabletradinginstrumentswithnopremiumsorguaranteedearnings.Earningswerereportedfor2014,buttheydidnotmeetthedefinitionforinclusionandhavebeendeletedfromthetable.
(6) AllOtherCompensation:AmountsshownrepresentpaymentsmadebyWPXonbehalfoftheNEOs.Thetotalincludesitemssuchas401(k)matchingandWPXannualemployercontribution,WPXnonqualifiedrestorationplanemployercontribution,andperquisites(ifapplicable).Perquisitesincludefinancialplanningservices,annualexecutivephysicalexam,andpersonaluseoftheCompanyaircraft.Messrs.Muncrief,Vann,GasparandCameronexceeded$10,000inperquisites.Mr.Muncrief'sperquisitesincludedfinancialplanning($625),executivephysical($2,559)andpersonaluseoftheCompanyaircraft($44,233).Mr.Vann'sperquisitesincludedfinancialplanning($7,500),executivephysical($4,629)andpersonaluseoftheCompanyaircraft($11,873).Mr.Gaspar'sperquisitesincludedfinancialplanning($7,500)andexecutivephysical($3,488).Mr.Cameron'sperquisitesincludedfinancialplanning($7,500)andexecutivephysical($3,224).TheincrementalcostmethodwasusedtocalculatethepersonaluseoftheCompanyaircraft.Theincrementalcostcalculationincludessuchitemsasfuel,maintenance,weatherandairportservices,pilotmeals,pilotovernightexpenses,aircrafttelephone,andcatering.Thecostforfinancialplanningandexecutivephysicalsareactualexpensesreimbursedorpaid.EmployercontributionstoNonqualifiedDeferredCompensationplansonbehalfofthenamedexecutiveofficerareasfollows:Mr.Muncrief($270,954),Mr.Vann($58,342),Mr.Gaspar($112,241),Mr.Guderian($55,948),Mr.Cameron($45,840)andMs.MacLeod($27,835).
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2016OutstandingEquityAwards
ThefollowingtablesetsforthcertaininformationwithrespecttooutstandingequityawardsheldbytheNEOsattheendofthefiscalyear2016.
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(7) Ms.MacLeodwasnotlistedinthe2014or2015proxy.Othercompensationincludesfinancialplanning($7,500),cashseverance($1,480,567),andapayoutofunusedpaidtimeoffasofterminationdate($39,346).
(8) The2014stockawardvaluesforMessrs.MuncriefandGaspararelargerthantypicalannualequitygrantsbecausetheyincludegrantsintendedtoreplacetheunvestedequityforfeitedfromtheirformeremployers.
StockAwards
EquityIncentivePlan
Awards:MarketorPayoutValueofUnearnedShares,Units,
orOtherRightsthat
havenotVested(6)
EquityIncentivePlan
Awards:Number
ofUnearnedShares,UnitsofStockorOtherRightsthat
havenotVested(4)
OptionAwards
Executive GrantDate(1)
NumberofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable
NumberofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable
EquityIncentivePlan
Awards:NumberofSecuritiesUnderlyingUnexercisedUnearnedOptions(#)
OptionExercisePrice
ExpirationDate
GrantDate(2)
Numberof
SharesorUnitsofStockthat
havenotVested
MarketValueofSharesorUnitsofStockthat
havenotVested(3)
RichardE.Muncrief 5/19/2016 240,000 $ 3,496,800 360,000 $ 5,245,200 3/2/2015 114,286 $ 1,665,147 257,142 $ 3,746,559 5/15/2014 80,778 40,389 21.45 3/3/2024 5/15/2014 23,374 $ 340,559 140,240 $ 2,043,297 5/15/2014 144,347 $ 2,103,136
J.KevinVann 5/19/2016 133,333 $ 1,942,662 88,888 $ 1,295,098 3/2/2015 50,420 $ 734,619 50,420 $ 734,619 7/29/2014 23,790 21.81 7/29/2024 7/29/2014 32,095 $ 467,624 3/3/2014 4,317 2,159 17.47 3/3/2024 3/3/2014 3,123 $ 45,502 5,621 $ 81,898 3/4/2013 7,812 14.41 3/4/2023 2/29/2012 5,857 18.16 2/28/2022 2/29/2012 1,851 $ 26,969 2/24/2011 3,560 16.46 2/24/2021 2/23/2010 4,131 11.75 2/23/2020 2/23/2009 2,019 6.02 2/23/2019 2/25/2008 6,604 20.21 2/25/2018 2/26/2007 4,375 15.67 2/26/2017
ClayM.Gaspar 5/19/2016 166,666 $ 2,428,324 111,111 $ 1,618,887 11/2/2015 93,502 $ 1,362,324 3/2/2015 50,420 $ 734,619 50,420 $ 734,619 10/27/2014 49,193 $ 716,742 72,687 $ 1,059,050
BryanK.Guderian 5/19/2016 66,666 $ 971,324 44,444 $ 647,549 3/2/2015 40,336 $ 587,696 40,336 $ 587,696 3/3/2014 19,785 9,893 17.47 3/3/2024 3/3/2014 9,159 $ 133,447 24,041 $ 350,277 3/4/2013 31,328 14.41 3/4/2023 2/29/2012 24,900 18.16 2/28/2022 2/29/2012 5,726 $ 83,428 2/24/2011 19,230 16.46 2/24/2021 2/23/2010 23,951 11.75 2/23/2020 2/23/2009 11,710 6.02 2/23/2019 2/25/2008 21,429 20.21 2/25/2018 2/26/2007 26,258 15.67 2/26/2017
DennisC.Cameron 5/19/2016 50,000 $ 728,500 33,333 $ 485,662 3/2/2015 25,210 $ 367,310 25,210 $ 367,310 3/3/2014 12,365 6,183 17.47 3/3/2024 3/3/2014 5,724 $ 83,399 15,025 $ 218,914 3/4/2013 7,812 14.41 3/4/2023 2/29/2012 8,891 18.16 2/28/2022
FormerExecutive MarciaM.MacLeod 3/2/2015 9,710 $ 141,475
3/3/2014 12,984 17.47 7/15/2021 3/3/2014 8,180 $ 119,183 3/4/2013 16,447 14.41 7/15/2021 2/29/2012 10,483 18.16 7/15/2021 2/24/2011 19,673 16.46 2/24/2021 2/23/2010 19,460 11.75 2/23/2020 2/23/2009 28,542 6.02 2/23/2019 2/25/2008 13,576 20.21 2/25/2018 2/26/2007 15,755 15.67 2/26/2017
StockOptions
(1) Thefollowingtablereflectsthevestingschedulesforassociatedstockoptiongrantdatesforawardsthathadnotbeen100%vestedasofDecember31,2016.
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2016GrantsofPlan-BasedAwards
ThefollowingtablesetsforthcertaininformationwithrespecttoawardspayableunderWPX'sannualcashincentiveprogramandRSUandRSAswithrespecttoWPXstockmadeduringthefiscalyear2016totheNEOs.Allinformationispresentedasofgrantdate.
50
GrantDate VestingSchedule VestingDates 7/29/2014 100%vestsinthreeyears 7/29/2017 5/15/2014 One-thirdvestseachyearforthreeyears 3/3/2015,3/3/2016,3/3/2017 3/3/2014 One-thirdvestseachyearforthreeyears 3/3/2015,3/3/2016,3/3/2017 3/4/2013 One-thirdvestseachyearforthreeyears 3/4/2014,3/4/2015,3/4/2016
StockAwards
(2) Thefollowingtablereflectsthevestingdatesforassociatedtime-basedRSUandRSAgrantdates.
Grant DateVestingSchedule VestingDates5/19/2016 One-thirdoftime-basedawardsvestannually 3/2/2017,3/2/2018,
3/2/201911/2/2015 One-thirdoftime-basedawardsvestannuallyfromthegrantdate 11/2/2016,11/2/2017,
11/2/20183/2/2015 One-thirdoftime-basedawardsvestannuallyfromthegrantdate 3/2/2016,3/2/2017,
3/2/201810/27/2014 One-thirdoftime-basedunitsvestannuallyfromthegrantdate 10/27/2015,10/27/2016,
10/27/20177/29/2014 100%cliff-vestinthreeyears 7/29/20175/15/2014 One-thirdoftime-basedawardsvestannuallyfromthegrantdate 3/3/2015,3/3/2016,
3/3/20173/3/2014 One-thirdoftime-basedawardsvestannuallyfromthegrantdate 3/3/2015,3/3/2016,
3/3/20172/29/2012 Theretirementgrant,whichwasmadeafterthespinofffromWilliamstocompensateemployeesforachangein
retirementbenefits,includingtwoNEOs,vestsinfiveyears 2/28/2017
(3) ValuesarebasedonclosingstockpriceforWPXEnergyof$14.57onDecember30,2016.
(4) Allperformance-basedRSUsaresubjecttoattainmentofperformancetargetsestablishedbytheCompensationCommittee.TheannualgrantpayoutisbasedonWPX'sTSRrelativetoitspeergroupoverthethree-yearperformanceperiod.Alloftheawardswillvestnoearlierthanthreeyearsfromthegrantdate.TheawardsincludedinthetableareoutstandingasofDecember31,2016,andfortheMarch3,2014grant,includestheperformanceattainmentof100%.
(5) ValuesarebasedonclosingstockpriceforWPXEnergyof$14.57onDecember30,2016.
AllOtherStock
Awards:Number
ofSharesofStock
orUnits(3)
AllOtherOptionAwards
NumberofSecuritiesUnderlyingOptions
GrantDate
FairValueofStockandOption
Awards(4)
EstimatedFuturePayoutsUnderNon-Equity
IncentivePlanAwards(1) EstimatedFuturePayoutsUnder
IncentivePlanAwards(2)
ExerciseorBasePriceofOptionAwards
Executive GrantDate Threshold Target Maximum Threshold Target Maximum
RichardE.Muncrief 5/19/2016 $ 462,000 $ 924,000 $ 2,310,000 108,000 360,000 720,000 $ 3,510,000
240,000 $ 2,340,000J.KevinVann 5/19/2016 184,000 368,000 736,000 26,666 88,888 177,776 $ 866,658
133,333 $ 1,299,997ClayM.Gaspar 5/19/2016 200,000 400,000 800,000 33,333 111,111 222,222 $ 1,083,332
166,666 $ 1,624,994BryanK.Guderian 5/19/2016 144,200 288,400 576,800 13,333 44,444 88,888 $ 433,329
66,666 $ 649,994DennisC.Cameron 5/19/2016 118,300 236,600 473,200 10,000 33,333 66,666 $ 324,997
50,000 $ 487,500FormerExecutive
MarciaM.MacLeod 0 0 0 0 0 0 $ 0
0 $ 0
(1) Non-equityIncentivePlanAwardsarefromWPX's2016AIP.Atthreshold,the2016AIPawardswouldbe50%oftarget.Thetargetamountisbaseduponattaining100%oftargetperformancegoalsforallfiveperformancemetrics.ThemaximumamounttheNEOscanreceiveis200%oftheirAIPtargetexceptfortheCEO,whichis250%.ThesetargetsreflecttheNEOssalaryasofJanuary1,2016,andtheapprovedincentivetargets.TheactualAIPawardisbasedontheireligibleearningsduringtheyearinwhichtheactualincentiveisbasedon.
(2) Representsperformance-basedRSUsgrantedunderWPX's2013IncentivePlan.Performance-basedRSUscanbeearnedoverathree-yearperiodonlyiftheestablishedperformancetargetismetandtheNEOisemployedonthevestingdate,subjecttocertainexceptionssuchastheexecutive'sdeathordisability.Theseshareswillbedistributednoearlierthanthethirdanniversaryofthegrantotherthanduetoaterminationuponachangein-control.Ifperformanceplangoalsareexceeded,theNEOcanreceiveupto200%oftarget.Ifplanthresholdgoalsarenotmet,theNEO'sawardsarecancelledintheirentirety.
(3) Representstime-basedRSAsgrantedunderWPX2013IncentivePlan.One-thirdoftime-basedawardsvestannuallyon3/3/2017,3/3/2018,and3/3/2019.
(4) Toarriveattheresultingnumberofperformance-basedRSUsandtime-basedRSAsawarded,thedollarvalueoftheapprovedawardwasdividedby$9.00,asapprovedbytheCommittee.ThedifferencebetweenthevalueapprovedbytheCommitteeandthegrant-dayvaluedisplayedbothintheSummaryCompensationTableandinthistablereflectsthedifferencebetween$9.00andtheclosingstockpriceonthegrantdayof$9.75.
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2016WPXOptionsExercisesandStockVested
ThefollowingtablesetsforthcertaininformationwithrespecttooptionstoacquirethestockofWPXexercisedbytheNEOsandstockthatvestedduringthefiscalyear2016totheNEOs.
2016NonqualifiedDeferredCompensation
Thefollowingtablesetsforthcertaininformationwithrespecttononqualifieddeferredcompensationduringthefiscalyear2016totheNEOs.
See"Executive Compensation—Compensation Discussion and Analysis—Benefits and Limited Perquisites" foradiscussionofcompensationthatmaybedeferred.Distributionsareavailablenosoonerthansixmonthsafterseparationfromservice,withchoicesoflumpsumoruptotenannualinstallments.Scheduledin-servicedistributionsarealsoavailable.
Change-in-ControlAgreements
WPXhasenteredintochange-in-controlagreementswithcertainofficers,includingeachofourNEOs.Theprovisionsofouragreementsaredescribedbelow.Thedefinitionsofwordsinquotationsarealsoprovidedbelow.
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OptionAwards StockAwards
Executive
NumberofShares
AcquiredonExercise
ValueRealizedonExercise
NumberofShares
AcquiredonVesting
ValueRealizedonVesting
RichardE.Muncrief — — 119,288 $ 1,711,928J.KevinVann — — 29,338 $ 224,843ClayM.Gaspar — — 80,013 $ 1,187,031BryanK.Guderian — — 49,892 $ 398,621DennisC.Cameron — — 22,571 $ 178,016FormerExecutive
MarciaM.MacLeod — — 43,367 $ 468,115
Executive
ExecutiveContributionsin
LastFY
RegistrantContributionsin
LastFY(1)
AggregateEarningsinLast
FY(2)
AggregateWithdrawals/Distributions
AggregateBalanceatLast
FYE RichardE.Muncrief $ 317,538 $ 270,954 $ 94,129 $ 0 $ 576,043J.KevinVann 0 58,342 7,916 0 $ 150,180ClayM.Gaspar 61,950 112,241 19,660 0 $ 169,651BryanK.Guderian 0 55,948 10,233 0 $ 227,718DennisC.Cameron 0 45,840 1,404 0 $ 141,305FormerExecutive
MarciaM.MacLeod 0 27,835 5,664 0 $ 143,263
(1) IncludedintheSummaryCompensationTableundercolumnlabeledAllOtherCompensationisanoncontributorycontributionmadebytheCompanytoitsnonqualifiedplansonbehalfofeachNEOlistedinthetable.ThecontributionsweremadeonJanuary30,2017,butwereattributableto2016compensation.
(2) Adiversearrayofinvestmentcreditingoptionsisavailabletoparticipantsthatfollowactualmarketinvestments.Themenuissuitedtovariablelevelsofrisktoleranceandpreferredassetclasses.Choicesmaybemadeasoftenasdaily.
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Ifa"change-in-control"occursand,withintwoyearsfollowingsuchchange-in-control(i)theemploymentofanyNEOisterminatedotherthanfor"cause,""disability,"death,ora"disqualificationdisaggregation,"or(ii)anNEOresignsfor"goodreason,"suchNEOisentitledtothefollowing:
• Accruedbutunpaidbasesalary,accruedearnedbutunpaidcashincentive,accruedbutunpaidpaidtimeoff,andanyotheramountsorbenefitsduebutnotpaid(lumpsumpayment);
• Proratedannualbonusfortheyearofseparationthroughtheterminationdate(lumpsumpayment);
• Aseveranceamountcomprisedofeither(a)threetimesinthecaseofourCEO,or(b)twotimesinthecaseofourotherNEOsthesumoftheexecutive'sbasesalaryplusanannualbonusamountequaltohis/heraverageactualAIPpaymentoverthepastthreeyears,assumingtheincumbenthasbeeninacomparablerole/levelinthecompanyduringthatperiod.(Iftheincumbenthasbeeninacomparablerole/levelforonlytwoyears,thentheaverageactualAIPpaymentwouldbecalculatedusingtheaverageofthosetwoyears.Similarly,iftheincumbenthasbeeninasimilarrole/levelforonlyoneyear,thentheaverageactualAIPwouldbeactualAIPearnedforthatoneyear.)(lumpsumpayment);
• Continuedeligibilitytoelectcoverageunderthemedicalbenefitplans("COBRA")forsolongastheNEOelectscoverageor18monthsfromthetermination,whicheverisless,plusalumpsumcashpaymentequaltothecostofthecontinuedmedicalcoveragefor18monthsunderCOBRA;
• AllrestrictionsonstockoptionsheldbytheNEOwilllapse,andtheoptionswillvestandbecomeimmediatelyexercisable;
• Allrestrictedstockwillvestandwillbepaidoutonlyinaccordancewiththetermsoftherespectiveawardagreements
• Continuedparticipationinthedirectors'andofficers'liabilityinsuranceforsixyearsoranylongerknownapplicablestatuteoflimitationsperiod;
• IndemnificationassetforthundertheCompany'sbylaws;and
• Outplacementbenefitsatacostnotexceeding$25,000.
Ouragreementsprovidea"bestnet"provisionprovidingtheNEOswiththebetteroftheirafter-taxbenefitcappedatthesafeharboramountortheirbenefitpaidinfullsubjectingthemtopossibleexcisetaxpayments.
IfanNEO'semploymentisterminatedfor"cause"duringtheperiodbeginninguponachange-in-controlandcontinuingfortwoyears,theNEOisentitledtoaccruedbutunpaidbasesalary,accruedearnedbutunpaidcashincentive,accruedbutunpaidpaidtimeoff,andanyotheramountsorbenefitsduebutnotpaid(lumpsumpayment).
OuragreementswithourNEOsusethefollowingdefinitions:
"Cause"meansanNEO's:
• convictionoforpleaofnolocontenderetoafelonyoracrimeinvolvingfraud,dishonestyormoralturpitude;
• willfulorrecklessmaterialmisconductintheperformanceofhis/herdutiesthathasanadverseeffectontheCompanyoranyofitssubsidiariesoraffiliates;
• willfulorrecklessviolationordisregardoftheCodeofBusinessConductoftheCompanyorthepoliciesoftheCompany;or
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• habitualorgrossneglectofduties.
Causegenerallydoesnotincludebadjudgmentornegligence(otherthanhabitualneglectorgrossnegligence);actsoromissionsmadeingoodfaithafterreasonableinvestigationbytheNEO;oractsoromissionswithrespecttowhichtheBoardofDirectorscoulddeterminethattheNEOhadsatisfiedthestandardsofconductforindemnificationorreimbursementunderourbylaws,indemnificationagreement,orapplicablelaw;orfailure(despitegoodfaithefforts)tomeetperformancegoals,objectives,ormeasuresforaperiodbeginninguponachange-in-controlandcontinuingfortwoyears.AnNEO'sactorfailuretoact(exceptasrelatestoaconvictionorpleaofnolocontenderedescribedabove),whendoneingoodfaithandwithareasonablebeliefafterreasonableinvestigationthatsuchactionornon-actionwasinthebestinterestoftheCompanyoritsaffiliateorrequiredbylawshallnotconstitutecauseiftheNEOcurestheactionornon-actionwithintenbusinessdaysofnotice.Furthermore,noactorfailuretoactwillbecauseiftheNEOactedundertheadviceoftheCompany'scounselorasrequiredbythelegalprocess.
"Change-in-control"means:
• Anypersonorgroup(otherthananaffiliateoftheCompanyoranemployeebenefitplansponsoredbytheCompanyoritsaffiliates)becomesabeneficialowner,assuchtermisdefinedundertheExchangeAct,of25%ormoreofthecommonstockoftheCompanyor25%ormoreofthecombinedvotingpowerofallsecuritiesentitledtovotegenerallyintheelectionofdirectorsoftheCompany("VotingSecurities");
• TheCompany'sdirectorsasofadateoftheagreement("OriginalDirectors")anddirectorsapprovedafterthatdatebyatleasttwo-thirdsoftheOriginalDirectorsceasetoconstituteamajorityofthedirectorsoftheCompany;
• Consummationofanymerger,reorganization,recapitalization,consolidationorsimilartransaction("ReorganizationTransaction"),otherthanaReorganizationTransactionthatresultsinthepersonswhowerethedirectorindirectownersofoutstandingcommonstockandVotingSecuritiesoftheCompanypriortothetransactionbecoming,immediatelyafterthetransaction,theownerofatleast65%ofthethen-outstandingcommonstockandVotingSecuritiesrepresentingatleast65%ofthecombinedvotingpowerofthethen-outstandingVotingSecuritiesofthesurvivingcorporationinsubstantiallythesamerespectiveproportionsassuchpersons'ownershipimmediatelybeforesuchReorganizationTransaction;or
• ApprovalbythestockholdersoftheCompanyofthesaleorotherdispositionofallorsubstantiallyalloftheconsolidatedassetsoftheCompanyorthecompleteliquidationoftheCompanyotherthanatransactionthatwouldresultin(i)arelatedpartyowningmorethan50%oftheassetsthatwereownedbytheCompanyimmediatelypriortothetransactionor(ii)thepersonswhowerethedirectorindirectownersofoutstandingcommonstockoftheCompanyandVotingSecuritiespriortothetransactioncontinuingtoown,directlyorindirectly,50%ormoreoftheassetsthatwereownedbytheCompanyimmediatelypriortothetransaction.Achange-in-controlwillnotoccuriftheNEOagreesinwritingpriortoaneventthatsuchaneventwillnotbeachange-in-control.
"Disability"meansaphysicalormentalinfirmitythatimpairstheNEO'sabilitytosubstantiallyperformhis/herdutiesfor12monthsormoreorforwhichhe/sheisreceivingincomereplacementbenefitsfromaCompanyplanfornotlessthanthreemonthsbecauseofanimpairmentthatisexpectedtolastfornotlessthan12months.
"Disqualificationdisaggregation"means:
• theterminationofanNEO'semploymentfromtheCompanyoranaffiliatebeforeachange-in-controlforanyreason;or
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• theterminationofanNEO'semploymentbyasuccessor(duringtheperiodbeginninguponachange-in-controlandcontinuingfortwoyears),iftheNEOisemployedinsubstantiallythesamepositionandthesuccessorhasassumedtheCompany'schange-in-controlagreement.
"Goodreason"means,generally,amaterialadversechangeintheNEO'stitle,positionorresponsibilities,areductionintheNEO'sbasesalary,amaterialreductionintheNEO'sannualbonus,requiredrelocation,amaterialreductioninthelevelofaggregatecompensationorbenefitsnotapplicabletotheNEO'speers,asuccessorcompany'sfailuretohonortheagreementorthefailureoftheCompany'sBoardofDirectorstoterminateanemployeewithin90daysofprovidingsuchemployeeofwrittennoticeofanactoromissionconstituting"cause."
TerminationScenarios(6)
54
Executive Payment For
Cause(1) Retirement(2) Death&
Disability(3) NotforCause(4) CIC(5)
RichardE.Muncrief StockOptions 0 NA 0 0 0 StockAwards 0 NA 12,684,057 12,684,057 18,640,698 CashSeverance 0 NA 0 2,604,000 3,444,000 Outplacement 0 NA 0 0 25,000 Health&Welfare 0 NA 0 50,000 21,555 Total $ 0 $ 0 $ 12,684,057 $ 15,338,057 $ 22,131,253
J.KevinVann StockOptions 0 NA 0 0 0 StockAwards 0 NA 4,224,629 4,224,629 5,796,617 CashSeverance 0 NA 0 1,422,462 1,408,308 Outplacement 0 NA 0 25,000 25,000 Health&Welfare 0 NA 0 20,526 30,790 Total $ 0 $ 0 $ 4,224,629 $ 5,692,617 $ 7,260,715
ClayM.Gaspar StockOptions 0 NA NA 0 0 StockAwards 0 NA 7,359,154 7,359,154 8,654,565 CashSeverance 0 NA 0 1,487,792 1,491,862 Outplacement 0 NA 0 25,000 25,000 Health&Welfare 0 NA 0 20,526 30,790 Total $ 0 $ 0 $ 7,359,154 $ 8,892,472 $ 10,202,217
BryanK.Guderian StockOptions 0 0 0 0 0 StockAwards 0 2,691,630 2,691,630 2,691,630 3,361,416 CashSeverance 0 0 0 1,114,798 1,731,999 Outplacement 0 0 0 25,000 25,000 Health&Welfare 0 0 0 20,526 30,790 Total $ 0 $ 2,691,630 $ 2,691,630 $ 3,851,954 $ 5,149,205
DennisC.Cameron StockOptions 0 NA 0 0 0 StockAwards 0 NA 1,783,012 1,783,012 2,251,094 CashSeverance 0 NA 0 923,178 979,452 Outplacement 0 NA 0 25,000 25,000 Health&Welfare 0 NA 0 20,526 30,790 Total $ 0 $ 0 $ 1,783,012 $ 2,751,716 $ 3,286,336
FormerExecutive MarciaM.MacLeod StockOptions 0 NA NA 0 NA
StockAwards 0 NA NA 468,115 NA CashSeverance 0 NA NA 1,480,567 NA Outplacement 0 NA NA 25,000 NA Health&Welfare 0 NA NA 14,369 NA Total $ 0 $ 0 $ 0 $ 2,751,716 $ 0
(1) ForCause:ForanNEOwhoisterminatedforcause,allunvestedstockoptionsandstockawardscancel.
(2) Retirement:IfanNEOretiresfromWPX,thenallunvestedstockoptionswillfullyaccelerate.Apro-ratedportionofthe2012and2013unvestedtime-basesRSUswillaccelerateandapro-ratedportionofanyperformance-basedRSUswillvestontheoriginalvestingdateiftheCompensationCommitteecertifiesthattheperformancegoalsweremet.
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Wemakenoassumptionsastotheachievementofperformancegoalsasitrelatestotheperformance-basedRSUs.IfanawardiscoveredbySection409AoftheCode,lumpsumpaymentsanddistributionsoccurringfromtheseeventswilloccursixmonthsafterthetriggeringeventasrequiredbytheCodeandourawardagreements.
CompensationCommitteeReport
TheCompensationCommitteehasreviewedanddiscussedwithmanagementthesectionaboveentitled"Compensation Discussion and Analysis ."Basedonthisreviewanddiscussion,theCompensationCommitteerecommendedtotheBoardthattheCompensationDiscussionandAnalysisbeincludedinthe2017ProxyStatement.
William R. Granberry, Chairman Henry E. Lentz David F. Work
DirectorCompensation
OurCompensationCommitteeisresponsibleforreviewingthecompensationfornon-managementdirectorsannuallyandrecommendinganychangestoourBoardofDirectors.TheobjectiveofthisannualreviewistodeterminewhetherourdirectorcompensationisappropriateinrelationtoothercomparableU.S.companiesandiscompetitivetoattractandretainthemostqualifiedmembersforourBoardofDirectors.
Ournon-employeedirectorsreceivecompensationintheformofbothcashandequity,withamuchgreaterproportionofthetotalcompensationdeliveredintheformofrestrictedstockthanincash.Thisrestrictedstockvestsoneyearafterthedateofgrant.Theweightingtowardequityhelpstoaligntheinterestsofourdirectorswithourstockholders.Tofurtheraligntheinterestsofourdirectorswiththelong-terminterestsofourstockholders,ourstockownershipguidelinesrequireeachdirectortoholdcommonstockofWPXequaltoatleastfivetimestheannualcashretainerpaidtodirectors.Undertheguidelines,sharesownedoutright,restrictedstockawards,andequitydeferredunderournonqualifieddeferredcompensationplanarecountedasowned.If,ontheannualcompliancedateofFebruary1ofeachyear,adirectordoesnotownsharesequaltofivetimestheannualcashretainer,thatdirectorisrequiredtoretain50%ofanyWPXequityacquiredthroughthevestingofrestrictedstock,netoftaxes,untilthenextFebruary1compliancedatewhenhisorherWPXstockownershipmeetstherequiredmultipleofpay.
55
(3) Death&Disability:IfanNEOdiesorbecomesdisabled,thenallunvestedstockoptionswillfullyaccelerate.Allunvestedtime-basedRSUsandRSAswillfullyaccelerateandapro-ratedportionofanyperformance-basedRSUswillvestiftheCompensationCommitteecertifiesthattheperformancegoalsweremet
(4) NotforCause:ForanNEOwhoisinvoluntarilyterminatedwhoreceivesseveranceorforanNEOwhosejobisoutsourcedwithnocomparableinternaloffer,allunvestedtime-basedRSUsandRSAswillfullyaccelerateandapro-ratedportionofanyperformance-basedRSUswillvestiftheCompensationCommitteecertifiesthattheperformancegoalsweremet.However,unlessanNEOisretirementeligible,allunvestedstockoptionswillcancel.Undertheindividualstockoptionagreements,ifanNEOisretirementeligible,thenallunvestedstockoptionswillfullyaccelerate.
(5) CIC:see"Change-in-Control Agreements "sectionabove.
(6) EligibilitytoparticipateinourexecutiveseveranceplayplanisdeterminedbytheCompensationCommitteeinthecaseofanexecutiveofficer.OurCEOisnotcoveredbytheexecutiveseverancepayplan,andinsteadissubjecttoanemploymentagreement.See"Executive Compensation—Compensation Discussion and Analysis—Employment Agreements ."Adeterminationofwhetheranemployeehasbeenterminatedforcauseunderourchange-in-controlagreementsisdeterminedbytheBoard.
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During2016,noneofournon-employeedirectorsdivestedsharesofourcommonstock,andonepurchasedatotalof12,500shares,10,000inourpublicequityofferingand2,500inanopen-marketpurchasesofourstock.
Underournonqualifieddeferredcompensationplan,non-employeedirectorsmaydeferupto100%oftheirannualcashretainerand/or100%oftheirannualequitygrant.AnycashorequitydeferredispaidwhenthedirectorleavesourBoard.
Thefollowingtablesummarizesourdirectorcompensationprogramfor2016andprovidesabreakdownofdirectorcompensationintheformofcashversusequity.
DirectorCompensationTable
ThefollowingtablesetsforthcertaininformationwithrespecttothecompensationoftheBoardofDirectorsearnedduringfiscalyear2016.
56
DollarValue PercentageofRetainer BoardMembers AnnualCashRetainer 75,000 29%AnnualEquityRetainer—RestrictedStock 185,000 71%TotalAnnualRetainer 260,000
CommitteeChairs AdditionalCashRetainer 15,000
Non-ExecutiveChairman AdditionalAnnualCashRetainer 20,000 15%AdditionalAnnualEquityRetainer—RestrictedStock 110,000 85%
TotalAnnualRetainer 130,000
Director
FeesEarnedorPaidin
Cash Stock
Awards(1)(2) OptionAwards
Non-EquityIncentivePlanCompensation
ChangeinPensionValueand
NonqualifiedDeferred
CompensationEarnings
AllOtherCompensation(3) Total
JohnA.Carrig 0 0 0 0 0 260,000 260,000WilliamR.Granberry 90,000 185,000 0 0 0 0 275,000RobertK.Herdman 90,000 0 0 0 0 185,000 275,000KeltKindick 75,000 185,000 0 0 0 0 260,000KarlF.Kurz 75,000 185,000 0 0 0 0 260,000HenryE.Lentz 75,000 185,000 0 0 0 0 260,000GeorgeA.Lorch 90,000 185,000 0 0 0 0 275,000WilliamG.Lowrie 95,000 295,000 0 0 0 0 390,000KimberlyS.Lubel 75,000 185,000 0 0 0 0 260,000DavidF.Work 75,000 0 0 0 0 185,000 260,000
(1) Representsthegrantdatefairvalueofthe2016stockawardsbasedona$9.75persharegrant-datestockprice.
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EQUITYCOMPENSATIONPLANINFORMATION
ThefollowingtableprovidesinformationconcerningWPXcommonstockthatmaybeissuedupontheexerciseofoptions,warrantsandrightsundertheWPXEnergy,Inc.2013IncentivePlan,asamended,asofDecember31,2016.
57
Director GrantDate NumberofShares
Granted GrantDateFair
Value JohnA.Carrig 5/19/2016 18,974 185,000WilliamR.Granberry 5/19/2016 18,974 185,000RobertK.Herdman 5/19/2016 18,974 185,000KeltKindick 5/19/2016 18,974 185,000KarlF.Kurz 5/19/2016 18,974 185,000HenryE.Lentz 5/19/2016 18,974 185,000GeorgeA.Lorch 5/19/2016 18,974 185,000WilliamG.Lowrie 5/19/2016 30,256 295,000KimberlyS.Lubel 5/19/2016 18,974 185,000DavidF.Work 5/19/2016 18,974 185,000
(2) Thenon-employeedirectorshavethefollowingstockandoptionawardsoutstandingasofDecember31,2016.
Director NumberofOutstandingOption
Awards NumberofOutstandingStock
Awards JohnA.Carrig 50,495WilliamR.Granberry 18,974RobertK.Herdman 50,495KeltKindick 18,974KarlF.Kurz 18,974HenryE.Lentz 18,974GeorgeA.Lorch 89,963WilliamG.Lowrie 30,256KimberlyS.Lubel 18,974DavidF.Work 32,350
(3) Theamountsdisclosedinthe"AllOtherCompensation"columnrelatetodeferredFeesEarnedorPaidinCashanddeferredStockAwards(atgrantdatevalue).
PlanCategory
NumberofSecuritiestobeIssuedupon
ExerciseofOutstandingOptions,WarrantsandRights
Weighted-AverageExercisePriceof
OutstandingOptions,Warrants,andRights(1)
NumberofSecuritiesRemainingAvailableforFutureIssuance
UnderEquityCompensationPlans(ExcludingSecurities
Reflectedinthe1stColumnofThis
Table) Equitycompensationplansapprovedbysecurityholders 2,667,036 $ 15.31 7,799,986
(1) Excludesthesharesissuableuponthevestingofrestrictedstockunitsandrestrictedstockawardsincludedinthefirstcolumnofthistableforwhichthereisnoweighted-averageexerciseprice.
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PROPOSAL2—ADVISORYVOTEONEXECUTIVECOMPENSATION
Atour2013annualmeetingofstockholders,ourstockholderselectedtohaveanadvisoryvoteonexecutivecompensationeveryyear.Weareaskingourstockholderstoprovideanadvisory,nonbindingvotetoapprovethecompensationawardedtoourNEOsfor2016.Thiscompensationisdescribedinthe"Executive Compensation "sectionandincludestheExecutiveSummary,CompensationDiscussionandAnalysis,andthecompensationtablesandrelateddisclosures.
AsdiscussedintheCompensationDiscussionandAnalysis,ourexecutivecompensationprogramisdesignedtofocusourexecutiveofficersonourstrategyofgrowingprofitableproductionandreserveswhilekeepingourunitcostdown,generatingpositivecashflow,andmaintainingadequateliquiditytomeetbusinessobjectives.Weemployperformancemetricstiedtoourstrategysoweencourageperformancethatcreateslong-termvalueforourstockholders.OurCompensationCommitteeoverseesourexecutivecompensationprogramandmaintainsafocusonpayingourexecutiveofficersforperformance,notonlythroughtheuseofperformancemetricstiedtoourstrategybutalsobyusingamixofcompensationelementsthatemphasizespaythatvariesbasedonWPX'sperformance.
In2016,wereceivedafavorableadvisoryvotewithapproximately96%oftheCompanysharesvotinginfavorofourexecutivecompensationprogram.WehavemadenosignificantchangestothestructureoftheCompany'sexecutivecompensationprogramasaresultofthevote.
Highlightsofourexecutivecompensationprograminclude:
• Themajorityofcompensationpaidtoourexecutivesisequity-based
• Weuseabalancedapproachtoperformancemetricstofocusexecutiveofficersonexecutingourstrategywhilediscouragingexcessiverisk-taking
• Ourstockownershipguidelinesencourageourexecutiveofficerstohaveasignificantstakeinourlong-termsuccessandaligntheirinterestswithstockholderinterests
• OurCompensationCommitteeregularlyreviewsshareutilization,overhanglevels,andtheannualrunrate
• Ourrecoupmentpolicyrequiresrecoveryofallperformance-basedincentivepaymentsfromexecutiveofficersfoundtoberesponsibleforfraudorintentionalmisconductthatresultsinasignificantrestatementofourfinancialresultsaswellasrecoupmentfromallotherexecutiveofficersofanyamountspaidinexcessoftheawardthatwouldhavebeenpaidbasedontherestatedfinancialresults
• Ourchange-in-controlagreementshaveadoubletriggerforpayments,equityawards,andotherbenefitssotheyarenottriggeredsolelyonachange-in-control
• WeprovideverylimitedperquisitestoourNEOs
• OurCompensationCommitteeengagesanindependentcompensationconsultanttoprovidecompetitivemarketdataforourexecutiveofficersandtoleaddiscussionsontrendswithinourindustry
• Whenmakingcompensationdecisions,ourCompensationCommitteeusestallysheetstoconsidertotaloutstandingequityvalueandestimatesofamountsthatwouldbepaidinvariousterminationscenarios
• Ourperformance-basedRSUprogramprohibitspayoutsinexcessof100%ifabsoluteTSRisnegative,regardlessoftherankingofourTSRrelativetopeers
• Otherthanthelimited-term,three-yearemploymentcontractenteredintowithourCEOinconnectionwithhisrecruitment,wedonotprovideemploymentcontractstoourNEOs
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• Wedonotprovidegross-upstocoverpersonalincometaxesthatpertaintoexecutiveorseverancebenefitsorthelimitedperquisitesthatweoffer
• Ourinsidertradingpolicyprohibitsshortsalesofourcommonstockandtheuseofequivalentderivativesecuritiesbyourdirectorsandexecutiveofficers(anti-hedgingpolicy)
• Wedonotpermitourdirectorsorexecutiveofficerstoengageinmargintradingofourstockortouseoursecuritiesascollateralforaloan(anti-pledgingpolicy)
• Ourincentiveplanprohibitstherepricingandbackdatingofstockoptionswithoutstockholderapproval.
Weareaskingourstockholderstoindicatetheirsupportforourexecutivecompensationprograms.WebelievetheinformationprovidedinthisProxyStatementdemonstratesourexecutivecompensationprogramisdesignedandoperatestoaligntheinterestsofourexecutiveofficerswiththeinterestsofourstockholderstocreatevalueoverthelong-term.
Whilethisvoteisadvisoryandnotbinding,wewillconsidertheoutcomeofthevote,alongwithotherrelevantfactors,whenmakingfutureexecutivecompensationdecisions.
Forthereasonssetforthabove,theBoardrecommendsthatyouvoteFORthefollowingresolution:
RESOLVEDthatthestockholdersapprove,onanadvisorybasis,thecompensationpaidtotheNEOs,asdisclosedinthisproxystatementpursuanttothecompensationdisclosurerulesoftheSecuritiesandExchangeCommission,includingtheCompensationDiscussionandAnalysis,thecompensationtables,andrelatednarrativediscussion.
CERTAINRELATIONSHIPSANDTRANSACTIONS
ProceduresforReviewandApprovalofRelated-PartyTransactions
TheBoardhasadoptedpoliciesandprocedureswithrespecttorelated-persontransactionsaspartoftheAuditCommitteecharter.Anyproposedrelated-persontransactioninvolvingamemberoftheBoardortheChiefExecutiveOfficermustbereviewedandapprovedbythefullBoard.TheAuditCommitteereviewsproposedtransactionswithanyotherrelatedpersons,promoters,andcertaincontrolpersons.IfitisimpracticaltoconveneanAuditCommitteemeetingbeforearelated-persontransactionoccurs,thechairofthecommitteemayreviewthetransactionalone.
Nodirectormayparticipateinanyreview,considerationorapprovalofanyrelated-persontransactionwithrespecttowhichsuchdirectororanyofhisorherimmediatefamilymembersistherelatedperson.TheAuditCommitteeoritschair,ortheBoard,asthecasemaybe,ingoodfaith,mayapproveonlythoserelated-persontransactionsthatarein,ornotinconsistentwith,WPXEnergy'sbestinterestsandthebestinterestsofourstockholders.Inconductingareviewofwhetheratransactionis,orisnotinconsistentwith,thebestinterestofWPXEnergyanditsstockholders,theAuditCommitteeoritschair,ortheBoard,asthecasemaybe,willconsiderthebenefitsofthetransactiontotheCompany,theavailabilityofothersourcesforcomparableproductsorservices,thetermsofthetransaction,thetermsavailabletounrelatedthirdpartiesandtoemployeesgenerally,andthenatureoftherelationshipbetweentheCompanyandtherelatedparty,amongotherthings.
COMPENSATIONCOMMITTEEINTERLOCKSANDINSIDERPARTICIPATION
Duringfiscal2016,Messrs.Granberry,LentzandWorkservedontheCompensationCommittee.NoneoftheseindividualshasbeenanofficeroremployeeoftheCompanyoranyofitssubsidiariesatanytime.In2016,noneofourexecutiveofficersservedasamemberoftheboardofdirectorsorcompensationcommitteeofanyothercompanythathasoneormoreexecutiveofficersservingasamemberofourBoardorCompensationCommittee.
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AUDITCOMMITTEEREPORT
TheAuditCommitteeofourBoardofDirectorsiscomprisedofthreenon-employeedirectors.TheBoardofDirectorshasdeterminedthatallofthemembersoftheAuditCommitteeareindependentwithinthemeaningofthelistingstandardsoftheNYSE,therulesoftheSECandtheCompany'sCorporateGovernanceGuidelinesandarefinanciallyliterateasdefinedbytheNYSEandareauditcommitteefinancialexpertsasdefinedbytheSEC.TheAuditCommitteeoperatesunderawrittencharteradoptedbytheBoardofDirectors.Consistentwiththischarter,theAuditCommitteeassiststheBoardofDirectorswithitsoversightresponsibilitiesastheyrelateto:
• theintegrityoftheCompany'sfinancialstatements;
• theeffectivenessoftheCompany'sinternalcontrolsoverfinancialreporting;
• theCompany'scompliancewithlegalandregulatoryrequirements;
• theimplementationandeffectivenessoftheCompany'sethicsandcomplianceprogram;
• theindependentauditor'squalificationsandindependence;and
• theperformanceoftheCompany'sindependentauditorandinternalauditors.
TheAuditCommitteealsohasresponsibilityforpreparingthisreport,whichmustbeincludedinourproxystatement,andappointingandretainingtheCompany'sindependentauditor.Inordertomeettheresponsibilitiesassignedtoitunderitscharter,theAuditCommitteeperformsanumberoftasks,includingthefollowing:
• Advancereviewofallauditandlegallypermittednon-auditservicestobeprovidedbyourindependentauditor.Thistaskincludessoleapprovalauthorityforthefeesandtermsoftheauditor'sengagement.
• ReviewoftheCompany'sauditedfinancialstatementsandquarterlyfinancialstatements.Inconnectionwiththistask,theAuditCommitteefocusesonseveralfactors,includingtheindependentauditor'sjudgmentofthequalityoftheCompany'saccountingprinciplesandmajorissuesregardingjudgmentsmadeinconnectionwiththepreparationoffinancialstatements.
• Atleastanannualevaluationoftheindependentauditor.TheAuditCommitteeestablishedaprocessforevaluatingtheindependentauditorthatincludesobtaininganannualassessmentfromtheCompany'smanagement.Thatassessmentincludesseveralfactorsrelatedtotheindependentauditor,includingqualificationsandexpertise,pastperformanceandappropriatenessoffees.TheAuditCommitteealsoconsidersthecommunicationandinteractionswiththeindependentauditoroverthecourseoftheyearandtheresultsofPCAOBinspections,andconductsareviewoftheindependentauditor'sinternalqualitycontrolprocedures.
• Atleastanannualevaluationoftheindependentauditor'sindependence.
• QuarterlyreviewsoftheCompany'searningspressreleasesaswellasreviewsofguidanceprovidedtoinvestors.
• PeriodicreviewsoftheadequacyandeffectivenessoftheCompany'saccountingandinternalcontrolpoliciesandprocedures.
• PeriodicreviewsoftheCompany'sprogramforassessingandmanagingrisks,includingstepsmanagementhastakentomonitorandcontrolexposurestosuchrisks.
ManagementisresponsiblefortheCompany'sinternalcontrolsandthefinancialreportingprocess.TheCompany'sindependentregisteredpublicaccountingfirm,Ernst&YoungLLP,isresponsibleforperforminganindependentauditoftheCompany'sconsolidatedfinancialstatementsinaccordance
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withthestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates),expressinganopinionastotheconformityofthefinancialstatementswithgenerallyacceptedaccountingprinciples,andexpressinganopinionontheCompany'sinternalcontroloverfinancialreporting.TheAuditCommittee'sresponsibilityistomonitorandoverseetheseprocesses.TheAuditCommitteehasdiscussedandreviewed,withbothmanagementandErnst&YoungLLP,management'sannualreportontheCompany'sinternalcontroloverfinancialreportingandErnst&YoungLLP'sattestation.
ManagementrepresentedtotheAuditCommitteethattheCompany'sconsolidatedfinancialstatementswerepreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica,andtheAuditCommitteehasreviewedanddiscussedwithmanagementandtheindependentregisteredpublicaccountingfirminseparatesessionstheCompany'sconsolidatedfinancialstatementsfortheyearsendedDecember31,2016,December31,2015andDecember31,2014.
TheAuditCommitteediscussedwithErnst&YoungLLPallmattersrequiredtobediscussedbyAuditingStandardNo.1301(CommunicationswithAuditCommittees).TheCompany'sindependentregisteredpublicaccountingfirmalsoprovidedtotheAuditCommitteethewrittendisclosuresandtheletterrequiredbyapplicablerequirementsofthePublicCompanyAccountingOversightBoardregardingtheindependentregisteredpublicaccountingfirm'scommunicationswiththeAuditCommitteeconcerningindependence,andtheAuditCommitteediscussedwiththeindependentregisteredpublicaccountingfirmtheaccountingfirm'sindependence.Inconsideringtheindependenceoftheindependentregisteredpublicaccountingfirm,theAuditCommitteetookintoconsiderationwhethertheprovisionofnon-auditservicesiscompatiblewithmaintainingtheindependenceoftheindependentregisteredpublicaccountingfirm.
TheCommitteealsoconsidersotherfactors,includingthepolicythatErnst&YoungLLPfollowswithrespecttorotationofitskeyauditpersonnel,sothatthereisanewpartner-in-chargeatleasteveryfiveyears.TheCommitteeisinvolvedintheselectionofthepartner-in-chargebythetimerotationisrequired.Ernst&YoungLLPdevelopsalistofpotentialcandidatesandidentifiesoneofthecandidatesasrecommendedbythefirm.TherecommendedcandidatemeetswithmembersofmanagementandtheCommittee.Attributesevaluatedincludeclientandfunctionalexperience,technicalcompetence,communicationskills,criticalbehaviors,familiaritywithauditcommitteeprocessesandindependentcommunicationsandstaturewithinErnst&YoungLLP.Iftherecommendedcandidateisselected,theprocessiscomplete.Iftherecommendedcandidateisnotselected,theprocesscontinueswithadditionalcandidatemeetingsuntilanacceptablecandidateisidentified.During2016,TheCommitteecompletedtheprocessfordeterminingthesuccessorpartnerfortherotationrequiredin2017.
BasedupontheAuditCommittee'sreviewofthefinancialstatements,management'sreportoninternalcontrolsoverfinancialreporting,independentdiscussionswithmanagementandErnst&YoungLLP,andtheAuditCommittee'sreviewoftherepresentationofmanagementandthereportoftheindependentregisteredpublicaccountingfirmtotheAuditCommittee,theAuditCommitteerecommendedtotheBoardofDirectorsthateachof(1)theauditedconsolidatedfinancialstatementsfortheyearsendedDecember31,2016,December31,2015andDecember31,2014,and(2)management'sreportoninternalcontrolsoverfinancialreportingbeincludedintheCompany'sAnnualReportonForm10-KforthefiscalyearendedDecember31,2016filedwiththeSEC.
MembersoftheAuditCommittee
Robert K. Herdman, Chairman John A. Carrig Kelt Kindick
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INDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
DisclosureofFeesPaidtoIndependentRegisteredPublicAccountingFirm
ThefollowingtablepresentsfeesforprofessionalservicesrenderedbyErnst&YoungLLPfortheauditoffinancialstatementsandotherservicesin2015and2016.
In2016and2015,allofErnst&YoungLLP'sfeeswerepre-approvedbytheCompany'sAuditCommittee.
AuditCommittee'sConsiderationofIndependenceofIndependentRegisteredPublicAccountingFirm
TheAuditCommitteehasreviewedthenatureofnon-auditservicesprovidedbyErnst&YoungLLPandhasconcludedthattheseservicesarecompatiblewithmaintainingthefirm'sabilitytoserveasourindependentregisteredpublicaccountingfirm.
PolicyonAuditCommitteePre-ApprovalofAuditandNon-AuditServicesofIndependentAuditors
TheAuditCommitteehasestablishedapolicyregardingpre-approvalofallauditandnon-auditservicesprovidedbyErnst&YoungLLP.
Onanongoingbasis,ourmanagementpresentsspecificprojectsandcategoriesofservicetotheAuditCommitteetorequestadvanceapproval.TheAuditCommitteereviewsthoserequestsandadvisesmanagementiftheAuditCommitteeapprovestheengagementofErnst&YoungLLP.Onaperiodicbasis,ourmanagementreportstotheAuditCommitteeregardingtheactualspendingforsuchprojectsandservicescomparedtotheapprovedamounts.TheAuditCommitteemayalsodelegatetheauthoritytopre-approveauditandpermittednon-auditservices,excludingservicesrelatedtotheCompany'sinternalcontroloverfinancialreporting,toasubcommitteeofoneormorecommitteemembers,providedthatanysuchpre-approvalsarereportedatasubsequentAuditCommitteemeeting.
TheAuditCommittee'spre-approvalpolicywithrespecttoauditandnon-auditservicesisanattachmenttotheAuditCommitteeCharter,whichisavailableonourwebsiteatwww.wpxenergy.comunder"Investors"and"CorporateGovernance."
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(inmillions) 2016 2015 AuditFees(1) $ 2.6 $ 3.6Audit-RelatedFees(2) $ — $ 0.1TaxFees(3) $ 0.5 $ 0.1AllOtherFees $ — $ —Total $ 3.1 $ 3.8
(1) Theaggregateauditfeesin2016and2015billedbyErnst&YoungLLPwereforfeesassociatedwiththeauditoftheCompany'sconsolidatedfinancialstatements,theauditofitsinternalcontroloverfinancialreporting,thereviewofitsquarterlyfinancialstatements,andservicesthatarenormallyprovidedinconnectionwithstatutoryandregulatoryfilings,includingconsultingservicesandservicesinconnectionwiththeCompany'sfilingsundertheSecuritiesActof1933,asamended.
(2) TheaggregatefeesbilledbyErnst&YoungLLPforaudit-relatedfeesconsistedofservicesinconnectionwithanacquisitionin2015.
(3) TheaggregatefeesbilledbyErnst&YoungLLPfortaxserviceswererelatedprimarilytotaxplanning,taxadvice,andtaxcompliance.
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PROPOSAL3—RATIFICATIONOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
TheAuditCommitteehasappointedErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2017.TheBoardhasproposedthatstockholdersratifythisappointmentattheAnnualMeeting.IfstockholdersdonotratifytheappointmentofErnst&YoungLLP,theAuditCommitteewillreconsidertheappointmentbutisnotobligatedtoappointanotherindependentregisteredpublicaccountingfirm.
InselectingErnst&YoungLLPasourindependentpublicaccountingfirmfor2017,theAuditCommitteeconsideredanumberoffactors,including:
• Ernst&YoungLLP'sinternalquality-controlprocedures,includingresultsofthemostrecentPublicCompanyAccountingOversightBoard(PCAOB)inspectionreportonErnst&YoungLLPandtheresultsofpeerreviewexaminations;
• ConsiderationofinvestigationsbygovernmentalorprofessionalauthoritiesandwhethertheymayimpairErnst&YoungLLP'sabilitytoperformourannualaudit;
• Ernst&YoungLLP'sindependenceprogramandanyrelationshipsbetweenErnst&YoungLLPandourcompanythatcouldhaveabearingonErnst&YoungLLP'sindependence;
• Ernst&YoungLLP'sindustryexperiencetoauditouroperations;
• Theprofessionalqualificationsoftheleadauditpartnerandotherkeyengagementpersonnel;
• Theperiodicrefreshmentofperspectiveandobjectivityprovidedbythemandatoryfive-yearrotationofthepartner-in-charge;
• Theengagementteam'scollectiveexpertiseandknowledgeofourbusiness,operationsandriskprofile;and
• TheresultsoftheevaluationofErnst&YoungLLP'sperformancedescribedintheAuditCommitteeReport.
RepresentativesofErnst&YoungLLPareexpectedtobepresentattheAnnualMeeting,willhaveanopportunitytomakeastatementiftheysodesireandwillbeavailabletorespondtoquestionsfromstockholders.
TheBoardrecommendsavoteFORratificationoftheselectionofErnst&YoungLLPasourindependentregisteredpublicaccountingfirmfortheyearendingDecember31,2017.ProxieswillbevotedFORratifyingthisselectionunlessyouspecifyotherwise.
SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT
ThefollowingtablesetsforthcertaininformationasofMarch10,2017,withrespecttothenumberofsharesofcommonstockownedby(a)eachdirectorandnomineefordirectoroftheCompany,(b)eachnamedexecutiveofficerofWPX,(c)alldirectorsandexecutiveofficersandnomineesasagroupand(d)eachstockholderknownbyWPXtoownbeneficiallymorethanfivepercentofaclassoftheoutstandingcommonstock.Unlessotherwisenoted,eachpersonandgroup
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identifiedpossessessolevotingandinvestmentpowerwithrespecttothesharesshownoppositesuchperson'sorgroup'sname.
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NameofIndividualorGroup
SharesofCommonStockOwnedDirectly
orIndirectly(1)(2)
OptionsExercisable
Within60DaysofMarch10,
2017(3) Total(1)(2)(3) PercentofClass(4)
JohnA.Carrig 128,302(5) 0 128,302(5) * WilliamR.Granberry 137,405(6) 0 137,405(6) * RobertK.Herdman 68,302 0 68,302 * KeltKindick 103,626 0 103,626 * KarlF.Kurz 44,023 0 44,023 * HenryE.Lentz 78,302 0 78,302 * GeorgeA.Lorch 178,071 0 178,071 * WilliamG.Lowrie 242,076 0 242,076 * KimberlyS.Lubel 73,252 0 73,252 * DavidF.Work 70,302 0 70,302 * DennisC.Cameron 249,384 35,251 284,635 * ClayM.Gaspar 915,382 0 915,382 * BryanK.Guderian 408,189 162,226 570,415 * RichardE.Muncrief 1,951,474 121,167 2,072,641 * J.KevinVann 532,617 36,459 569,076 * Alldirectorsnomineesandexecutiveofficersasagroup(15individuals) 5,180,707 355,103 5,535,810 1.4%
BlackRock,Inc.(7) 29,653,840 0 29,653,840 8.5%WellingtonManagementGroupLLP(andrelatedparties)(8) 34,306,624 0 34,306,624 9.96%TheVanguardGroup,Inc.(andrelatedparties)(9) 27,531,169 0 27,531,169 7.99%
* Lessthan1%.
(1) IncludesrestrictedstockunitsoverwhichexecutiveofficershavenovotingorinvestmentpowerheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlanasfollows:Mr.Cameron,94,801;Mr.Gaspar,374,056;Mr.Guderian,139,167;Mr.Muncrief,1,022,547;Mr.Vann243,919;andallNEOswhoarecurrentlyexecutiveofficers,1,847,490.RestrictedstockunitsheldbyMessrs.GasparandVannincludebothtime-basedandperformance-basedawards.RestrictedstockunitsheldbyMessrs.Cameron,GuderianandMuncriefonlyincludeperformance-basedawards.
(2) IncludesrestrictedstockunitsandsharesofdeferredcommonstockoverwhichindependentdirectorshavenovotingorinvestmentpowerheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlanasfollows:Mr.Carrig,50,495;Mr.Herdman,50,495;Mr.Lorch,70,989;Mr.Work32,350;andallindependentdirectorsasagroup,204,329.Thesedirectorshavetherighttoacquirethesharesunderlyingtheserestrictedstockunitsandsharesofdeferredcommonstockwithin60daysofMarch10,2017,exceptfor9,141oftherestrictedstockunitsheldbyMr.Lorch.Restrictedstockunitsincludetime-basedawards.IncludesrestrictedsharesofcommonstockheldunderthetermsoftheWPXEnergy,Inc.2013IncentivePlan,whichwillvestonMay19,2017,asfollows:Mr.Granberry,18,974;Mr.Kindick,18,974;Mr.Kurz,18,974;Mr.Lentz,18,974;Mr.Lorch,18,974;Mr.Lowrie,30,256;andMs.Lubel,18,974.
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(3) ThesharesindicatedrepresentstockoptionsgrantedundertheWPXEnergy,Inc.2013IncentivePlanthatarecurrentlyexercisableorwillbecomeexercisablewithin60daysofMarch10,2017.Sharessubjecttooptionscannotbevoted.
(4) Ownershippercentageisreportedbasedon397,402,131sharesofcommonstockoutstandingonMarch10,2017,plus,astotheholderthereofandnootherperson,thenumberofshares(ifany)thatthepersonhastherighttoacquireasofMarch10,2017,orwithin60daysofthatdate.Restrictedstockunitsthatdonotvestwithin60daysofMarch10,2017arenotincludedinownershippercentage.
(5) Includes10,000sharesownedbyMr.Carrig'sspouse,overwhichshepossessessolevotingandinvestmentpower.
(6) Includes1,496sharesownedbyMr.Granberry'sspouse,overwhichshepossessessolevotingandinvestmentpower.
(7) Theaddressofthisentityis55East52ndStreet,NewYork,NY10055.TheinformationprovidedisbasedonaSchedule13G/AfiledbyBlackRock,Inc.onoraboutJanuary27,2017.ThatfilingindicatesthatBlackRock,Inc.hassolevotingpowerasto28,423,665ofthesharesshown,soledispositivepowerastoall29,643,906sharesshownandshareddispositivepowerasto9,934ofthesharesshown.
(8) Theaddressofthisentityisc/oWellingtonManagementCompanyLLP,280CongressStreet,Boston,MA02210.TheinformationprovidedisbasedonaSchedule13G/AjointlyfiledbyWellingtonManagementGroupLLP("WellingtonManagement"),WellingtonGroupHoldingsLLP("WellingtonHoldings"),WellingtonInvestmentAdvisorsHoldingsLLP("WellingtonAdvisors")andWellingtonManagementCompanyLLP("WellingtonCompany")onoraboutFebruary9,2017.ThesesharesareownedofrecordbyclientsofWellingtonCompany,WellingtonManagementCanadaLLC,WellingtonManagementSingaporePteLtd.,WellingtonManagementHongKongLtd.,WellingtonManagementInternationalLtd.,WellingtonManagementJapanPteLtd.andWellingtonManagementAustraliaPtyLtd.(collectively,the"WellingtonInvestmentAdvisors").WellingtonAdvisorscontrolsdirectly,orindirectlythroughWellingtonManagementGlobalHoldingsLtd.,theWellingtonInvestmentAdvisors.WellingtonAdvisorsisownedbyWellingtonHoldings.WellingtonHoldingsisownedbyWellingtonManagement.TheclientsoftheWellingtonInvestmentAdvisorshavetherighttoreceive,orthepowertodirectthereceiptof,dividendsfrom,ortheproceedsfromthesaleof,suchsecurities.Nosuchclientisknowntohavesuchrightorpowerwithrespecttomorethanfivepercentofthisclassofsecurities.EachofWellingtonManagement,WellingtonHoldingsandWellingtonAdvisorshassharedvotingpowerover26,636,469ofthesharesshownandshareddispositivepowerover34,306,624ofthesharesshown.WellingtonCompanyhassharedvotingpowerover23,833,798ofthesharesshownandshareddispositivepowerover29,385,616ofthesharesshown.
(9) Theaddressofthisentityis100VanguardBoulevard,Malvern,Pennsylvania19355.TheinformationprovidedisbasedonaSchedule13G/AfiledbyTheVanguardGroup,Inc.onoraboutFebruary10,2017.ThatfilingindicatesthatTheVanguardGrouphassolevotingpowerasto204,923ofthesharesshown,soledispositivepowerasto27,311,242ofthesharesshownandshareddispositivepowerasto219,927ofthesharesshown.ThatfilingalsoindicatesthatVanguardFiduciaryTrustCompany,awholly-ownedsubsidiaryofTheVanguardGroup,Inc.,isthebeneficialownerof186,646ofthesharesshownasaresultofitsservingasinvestmentmanagerofcollectivetrustaccounts.ThatfilingfurtherindicatesthatVanguardInvestmentsAustralia,Ltd.,awholly-ownedsubsidiaryofTheVanguardGroup,Inc.,isthebeneficialownerof51,558ofthesharesshownasaresultofitsservingasinvestmentmanagerofAustralianinvestmentofferings.
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SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE
Section16(a)oftheExchangeActrequiresourdirectorsandexecutiveofficers,andcertainpersonswhoownmorethantenpercentofourcommonstock,tofilewiththeSECinitialreportsofownershipandreportsofchangesinownershipofourcommonstockandotherequitysecurities.Directors,executiveofficersandthesegreater-than—ten-percentstockholdersarerequiredbySECregulationstofurnishuswithcopiesofallSection16(a)formstheyfile.
Toourknowledge,basedsolelyonareviewofthecopiesofthesereportsandotherinformationfurnishedtous,allSection16(a)filingrequirementsapplicabletoourdirectors,executiveofficersandgreater—than-ten-percentbeneficialownerswerecompliedwithonatimelybasisduringandfortheyearendedDecember31,2016.
OTHERMATTERSATMEETING
InaccordancewiththerequirementsofadvancenoticedescribedinourBylaws,nostockholdernominationsorstockholderproposalswillbepresentedattheAnnualMeeting.WeknowofnoothermattersthatmaycomebeforetheAnnualMeeting.However,ifanymatterscallingforavoteofthestockholders,otherthanthosereferredtointhisproxystatement,shouldproperlycomebeforethemeeting,thepersonsnamedintheenclosedproxywillvotesuchproxyaccordingtotheirindividualjudgment.
Tulsa,OklahomaApril4,2017
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ByOrderoftheBoardofDirectors,
StephenE.BrilzVice President and Corporate Secretary
MMMMMMMMMMMM . MMMMMMMMMMMMMMM C123456789 000004 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext ENDORSEMENT_LINE______________ SACKPACK_____________ Electronic Voting Instructions Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 17, 2017. MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 Vote by Internet • Go to www.envisionreports.com/WPX • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone • Follow the instructions provided by the recorded message Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Proposals — The Board recommends a vote FOR all nominees, and FOR Proposals 2 and 3. + 1. Election of Directors: For Against Abstain For Against Abstain For Against Abstain 01 - John A. Carrig 02 - William R. Granberry 03 - Robert K. Herdman 05 - Karl F. Kurz 06 - Henry E. Lentz 04 - Kelt Kindick 08 - William G. Lowrie 09 - Kimberly S. Lubel 07 - George A. Lorch 11 - David F. Work 10 - Richard E. Muncrief For Against Abstain ForAgainst Abstain 2. Say on Pay - An advisory vote on the approval of executive compensation. 3. Proposal to ratify the appointment of Ernst & Young LLP as the independent public accounting firm for the Company for the year ending December 31, 2017. Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below Please sign exactly as name(s) appears hereon. Joint
owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. MMMMMMMC 1234567890 IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. J N T MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND + 1 U P X3 2 5 4 3 1 1 02JK8B MMMMMMMMM B A Annual Meeting Proxy Card1234 5678 9012 345 X IMPORTANT ANNUAL MEETING INFORMATION
. 2017 Annual Meeting of WPX Energy, Inc. Stockholders Thursday, May 18, 2017, 9:30 a.m. (Central Time) Seville I Room Renaissance Tulsa Hotel & Convention Center 6808 South 107th East Avenue Tulsa, Oklahoma 74133 Directions to the Renaissance Tulsa Hotel & Convention Center From the airport: Travel west on Airport Drive to North 76th East Avenue and turn left. Turn right then make a slight left onto Airport Drive. Proceed to East Virgin Street and turn right. Make a slight left onto the ramp and merge onto OK-11 East. Follow OK-11 East to exit 9 and merge to the left onto US-244 East. From US-244 East take exit 13B for US-169 South. Continue on US-169 South to the East 61st Street South exit. Keep left at the fork in the ramp and turn left onto East 61st Street South. Proceed to South 107th East Avenue and turn right. The hotel is approximately 6/10 mile on the right. q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q + Proxy — WPX Energy, Inc. Notice of 2017 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for Annual Meeting Dennis C. Cameron and Stephen E. Brilz, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of WPX Energy, Inc. to be held on May 18, 2017 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. (Items to be voted appear on reverse side.) Non-Voting Items Change of Address — Please print your new address below. Comments — Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. + IF VOTING BY MAIL, YOU MUST COMPLETE SECTIONS A - C ON BOTH SIDESOF THIS CARD. C