QEP Resources, Inc.

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SEC Filings

DEF 14A
QEP RESOURCES, INC. filed this Form DEF 14A on 04/05/2018
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ITEM NO. 5 – APPROVAL OF THE QEP RESOURCES, INC. 2018 LONG-TERM INCENTIVE PLAN

Overview

The information provided in this Item No. 5 is intended to assist our shareholders in deciding how to cast their votes on the QEP Resources, Inc. 2018 Long-Term Incentive Plan (the "2018 Plan"), which will allow the Board to grant long-term incentive compensation on the terms described herein. The Board adopted the 2018 Plan on February 11, 2018 subject to shareholder approval at the annual meeting.

The Board believes that the effective use of cash and stock-based long-term incentive compensation has been integral to the Company's success in the past and is vital to its ability to achieve continued strong performance in the future. The Board believes that grants of equity awards will help create long-term participation in the Company and, thereby, assist us in attracting, retaining, motivating and rewarding employees, directors and consultants. The use of long-term equity grants allows the Board to align the incentives of the Company's employees, directors and consultants with the interests of its shareholders, linking compensation to Company performance. The use of equity awards as compensation also allows the Company to conserve cash resources for other important purposes. Accordingly, the Board believes that approval of the 2018 Plan is in the best interests of the Company and the Board recommends that shareholders vote for approval of the 2018 Plan.

The 2018 Plan is intended to replace our 2010 Long-Term Stock Incentive Plan (the "LTSIP"), which we have used previously to grant stock and equity compensation awards. If the 2018 Plan is approved by shareholders at the Annual Meeting, no additional awards will be made under the LTSIP. All awards previously granted under the LTSIP will remain subject to the terms of the LTSIP.

The 2018 Plan authorizes the issuance of a total of 10,000,000 shares. In addition, subject to certain limitations, shares covered by an award granted under the 2018 Plan or shares covered by an award previously granted under the LTSIP which expire or are cancelled without having been exercised in full or that are forfeited or repurchased shall be added to the shares authorized for issuance under the 2018 Plan. For additional information about the shares which may be added to the shares authorized for issuance under the 2018 Plan, see the discussion below under the heading "Description of the 2018 Plan - Share Counting Provisions."

If the 2018 Plan is not approved by the shareholders, the LTSIP will remain in effect and we will continue to make grants under the LTSIP until all shares available thereunder have been issued.

Information on Equity Compensation Plans as of March 26, 2018

The information included in this proxy statement and our Form 10-K for the fiscal year ending December 31, 2017 is updated by the following information regarding all existing equity compensation plans as of March 26, 2018:

Total number of stock options outstanding: 2,152,042;
Weighted-average exercise price of stock options outstanding under all existing equity compensation plans: $22.17;
Weighted-average remaining contractual term of stock options outstanding: 3.56 years;
Total number of full value awards outstanding: 5,226,102;
Total number of shares of common stock outstanding: 237,895,270; and
Total number of shares that were available for grant under the LTSIP: 2,324,488 shares (if the 2018 Plan is approved at the Annual Meeting, no additional awards will be granted under the LTSIP, and the only shares available for grant will be the 10,000,000 shares authorized under the 2018 Plan).

Purpose and Background for the Determination of Additional Shares

The purpose of the 2018 Plan is to enhance the Company's ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership and other incentive opportunities. We believe that the 2018 Plan is essential to our success. Equity awards are intended to motivate high levels of performance, align the interests of our employees, directors, and

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