6. Employee Benefit Plans

Stock-Based Compensation

During 2013, EOG maintained various stock-based compensation plans as discussed below. EOG recognizes compensation expense on grants of stock options, SARs, restricted stock and restricted stock units, performance units and performance stock, and grants made under its Employee Stock Purchase Plan (ESPP). Stock-based compensation expense is calculated based upon the grant date estimated fair value of the awards, net of forfeitures, based upon EOG's historical employee turnover rate. Compensation expense is amortized over the shorter of the vesting period or the period from date of grant until the date the employee becomes eligible to retire without company approval.

Stock-based compensation expense is included on the Consolidated Statements of Income and Comprehensive Income based upon the job functions of the employees receiving the grants. Compensation expense related to EOG's stock-based compensation plans for the years ended December 31, 2013, 2012 and 2011 was as follows (in millions):

	2013		2012		2011

Lease and Well	$	35	$	35	$	33
Gathering and Processing Costs		1		1		1
Exploration Costs		27		27		26
General and Administrative		71		65		68
Total	$	134	$	128	$	128

The Amended and Restated EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan (2008 Plan) provides for grants of stock options, SARs, restricted stock and restricted stock units, performance stock and performance units, and other stock-based awards up to an aggregate maximum of 28.4 million shares. At December 31, 2013, approximately 16.6 million shares of Common Stock remained available for grant under the 2008 Plan. EOG's policy is to issue shares related to the 2008 Plan from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

During 2013, 2012 and 2011, EOG issued shares in connection with stock option/SAR exercises, restricted stock and performance stock grants, restricted stock unit releases and ESPP purchases. EOG recognized, as an adjustment to APIC, federal income tax benefits of $56 million, $67 million and $25,000 for 2013, 2012 and 2011, respectively, related to the exercise of stock options/SARs and the release of restricted stock and restricted stock units.

Stock Options and Stock-Settled Stock Appreciation Rights and Employee Stock Purchase Plan. Participants in EOG's stock-based compensation plans (including the 2008 Plan) have been or may be granted options to purchase shares of Common Stock. In addition, participants in EOG's stock plans (including the 2008 Plan) have been or may be granted SARs, representing the right to receive shares of Common Stock based on the appreciation in the stock price from the date of grant on the number of SARs granted. Stock options and SARs are granted at a price not less than the market price of the Common Stock on the date of grant. Stock options and SARs granted vest on a graded vesting schedule up to four years from the date of grant based on the nature of the grants and as defined in individual grant agreements. Terms for stock options and SARs granted have not exceeded a maximum term of 10 years. EOG's ESPP allows eligible employees to semi-annually purchase, through payroll deductions, shares of Common Stock at 85 percent of the fair market value at specified dates. Contributions to the ESPP are limited to 10 percent of the employee's pay (subject to certain ESPP limits) during each of the two six-month offering periods each year.

The fair value of stock option grants and SAR grants is estimated using the Hull-White II binomial option pricing model. The fair value of ESPP grants is estimated using the Black-Scholes-Merton model. Stock-based compensation expense related to stock option, SAR and ESPP grants totaled $53 million, $49 million and $48 million for the years ended December 31, 2013, 2012 and 2011, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants for the years ended December 31, 2013, 2012 and 2011 were as follows:

	Stock Options/SARs									ESPP
	2013			2012			2011			2013			2012			2011

Weighted Average Fair Value of Grants	$	54.70		$	37.95		$	29.92		$	30.12		$	25.11		$	22.75
Expected Volatility		35.86	%		39.68	%		40.96	%		29.89	%		40.92	%		29.82	%
Risk-Free Interest Rate		0.78	%		0.45	%		0.58	%		0.11	%		0.11	%		0.14	%
Dividend Yield		0.40	%		0.60	%		0.70	%		0.60	%		0.60	%		0.70	%
Expected Life	5.5 yrs			5.6 yrs			5.6 yrs			0.5 yrs			0.5 yrs			0.5 yrs

Expected volatility is based on an equal weighting of historical volatility and implied volatility from traded options in EOG's Common Stock. The risk-free interest rate is based upon United States Treasury yields in effect at the time of grant. The expected life is based upon historical experience and contractual terms of stock option, SAR and ESPP grants.

The following table sets forth the stock option and SAR transactions for the years ended December 31, 2013, 2012 and 2011 (stock options and SARs in thousands):

	2013					2012					2011
	Number of Stock Options/ SARs			Weighted Average Grant Price		Number of Stock Options/ SARs			Weighted Average Grant Price		Number of Stock Options/ SARs			Weighted Average Grant Price

Outstanding at January 1		6,219		$	85.81		8,374		$	70.01		8,445		$	64.49
Granted		1,134			167.40		1,240			111.97		1,509			85.29
Exercised ⁽¹⁾		(2,023	)		71.23		(3,246	)		54.80		(1,399	)		50.86
Forfeited		(104	)		101.56		(149	)		91.18		(181	)		87.74
Outstanding at December 31		5,226			108.86		6,219			85.81		8,374			70.01

Stock Options/SARs Exercisable at December 31		2,319			87.90		3,143			74.98		5,148			59.19

(1)

The total intrinsic value of stock options/SARs exercised during the years 2013, 2012 and 2011 was $151 million, $185 million and $78 million, respectively. The intrinsic value is based upon the difference between the market price of the Common Stock on the date of exercise and the grant price of the stock options/SARs.

At December 31, 2013, there were 5.0 million stock options/SARs vested or expected to vest with a weighted average grant price of $108.03 per share, an intrinsic value of $300 million and a weighted average remaining contractual life of 4.5 years.

The following table summarizes certain information for the stock options and SARs outstanding and exercisable at December 31, 2013 (stock options and SARs in thousands):

Stock Options/SARs Outstanding								Stock Options/SARs Exercisable
Range of Grant Prices	Stock Options/ SARs		Weighted Average Remaining Life (Years)		Weighted Average Grant Price		Aggregate Intrinsic Value⁽¹⁾	Stock Options/ SARs		Weighted Average Remaining Life (Years)		Weighted Average Grant Price		Aggregate Intrinsic Value⁽¹⁾

$ 26.00 to $ 81.99		764		2	$	77.08			760		2	$	77.13
82.00 to 89.99		1,380		4		84.82			765		3		85.87
90.00 to 109.99		837		4		93.39			519		4		92.87
110.00 to 136.99		1,154		6		113.22			274		5		113.65
137.00 to 178.99		1,091		7		168.77			1		1		168.86
		5,226		5		108.86	$309,422		2,319		3		87.90	$185,362

(1)	Based upon the difference between the closing market price of the Common Stock on the last trading day of the year and the grant price of in-the-money stock options and SARs.

At December 31, 2013, unrecognized compensation expense related to non-vested stock option and SAR grants totaled $103 million. This unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.7 years.

At December 31, 2013, approximately 498,000 shares of Common Stock remained available for issuance under the ESPP. The following table summarizes ESPP activities for the years ended December 31, 2013, 2012 and 2011 (in thousands, except number of participants):

	2013		2012		2011

Approximate Number of Participants		1,844		1,705		1,525
Shares Purchased		128		164		135
Aggregate Purchase Price	$	14,015	$	12,522	$	10,947

Restricted Stock and Restricted Stock Units. Employees may be granted restricted (non-vested) stock and/or restricted stock units without cost to them. The restricted stock and restricted stock units generally vest five years after the date of grant, except for certain bonus grants, and as defined in individual grant agreements. Upon vesting of restricted stock, shares of Common Stock are released to the employee. Upon vesting, restricted stock units are converted into shares of Common Stock and released to the employee. Stock-based compensation expense related to restricted stock and restricted stock units totaled $72 million, $72 million and $80 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The following table sets forth the restricted stock and restricted stock unit transactions for the years ended December 31, 2013, 2012 and 2011 (shares and units in thousands):

	2013					2012					2011
	Number of Shares and Units			Weighted Average Grant Date Fair Value		Number of Shares and Units			Weighted Average Grant Date Fair Value		Number of Shares and Units			Weighted Average Grant Date Fair Value

Outstanding at January 1		3,818		$	91.06		4,240		$	82.93		4,009		$	79.13
Granted		647			152.07		767			112.17		932			90.87
Released ⁽¹⁾		(684	)		104.78		(1,059	)		72.70		(457	)		66.10
Forfeited		(102	)		97.10		(130	)		85.36		(244	)		82.45
Outstanding at December 31 ⁽²⁾		3,679			99.08		3,818			91.06		4,240			82.93

(1)

The total intrinsic value of restricted stock and restricted stock units released during the years ended December 31, 2013, 2012 and 2011 was $101 million, $120 million and $44 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date restricted stock and restricted stock units are released.

(2)	The aggregate intrinsic value of restricted stock and restricted stock units outstanding at December 31, 2013 and 2012 was approximately $617 million and $461 million, respectively.

At December 31, 2013, unrecognized compensation expense related to restricted stock and restricted stock units totaled $154 million. Such unrecognized expense will be recognized on a straight-line basis over a weighted average period of 2.4 years.

Performance Units and Performance Stock. EOG grants performance units and/or performance stock to its executive officers. As more fully discussed in the grant agreements, the performance metric applicable to these performance-based grants is EOG's total shareholder return over a three-year performance period relative to the total shareholder return of a designated group of peer companies. Upon the application of the performance multiple at the completion of the performance period, a minimum of zero and a maximum of 261,390 performance units/shares could be outstanding (based on the number of performance units/shares outstanding as of December 31, 2013). Subject to the termination provisions set forth in the grant agreements and the applicable performance multiple, the grants of performance shares/units will "cliff" vest five years from the date of grant. The fair value of the performance units and performance stock is estimated using a Monte Carlo simulation. Stock-based compensation expense related to performance unit and performance stock grants totaled $9 million and $7 million for the years ended December 31, 2013 and 2012, respectively.

Weighted average fair values and valuation assumptions used to value performance unit and performance stock grants during the years ended December 31, 2013 and 2012 are as follows:

	2013			2012

Weighted Average Fair Value of Grants	$	200.68		$	134.09
Expected Volatility		33.63	%		36.39	%
Risk-Free Interest Rate		0.79	%		0.39	%

Expected volatility is based on the term-matched historical volatility over the simulated term, which is calculated as the time between the grant date and the end of the performance period. The risk-free interest rate is based on a 3.26 year zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the grant date.

The following table sets forth performance unit and performance stock transactions for the years ended December 31, 2013 and 2012 (shares and units in thousands):

	2013				2012
	Number of Shares and Units		Weighted Average Grant Date Fair Value		Number of Shares and Units		Weighted
							Average
							Grant Date
							Fair Value

Outstanding at January 1		71	$	134.09		-	$	-
Granted		60		200.68		71		134.09
Released		-		-		-		-
Forfeited		-		-		-		-
Outstanding at December 31 ⁽¹⁾		131	$	164.36		71	$	134.09

(1)

The total intrinsic value of performance units and performance stock outstanding at December 31, 2013 and 2012 was $21.9 million and $8.6 million, respectively.

At December 31, 2013, unrecognized compensation expense related to performance units and performance stock totaled $6 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.4 years.

Pension Plans. EOG has a defined contribution pension plan in place for most of its employees in the United States. EOG's contributions to the pension plan are based on various percentages of compensation and, in some instances, are based upon the amount of the employees' contributions. EOG's total costs recognized for the plan were $37 million, $36 million and $27 million for 2013, 2012 and 2011, respectively.

In addition, EOG's Canadian subsidiary maintains both a non-contributory defined benefit pension plan and a non-contributory defined contribution pension plan, as well as a matched defined contribution savings plan. EOG's Trinidadian subsidiary maintains a contributory defined benefit pension plan and a matched savings plan. EOG's United Kingdom subsidiary maintains a pension plan which includes a non-contributory defined contribution pension plan and a matched defined contribution savings plan. With the exception of Canada's non-contributory defined benefit pension plan, which is closed to new employees, these pension plans are available to most employees of the Canadian, Trinidadian and United Kingdom subsidiaries. EOG's combined contributions to these plans were $4 million, $3 million and $3 million for 2013, 2012 and 2011, respectively.

For the Canadian and Trinidadian defined benefit pension plans, the benefit obligation, fair value of plan assets and accrued benefit cost totaled $13 million, $11 million and $1 million, respectively, at December 31, 2013, and $14 million, $10 million and $2 million, respectively, at December 31, 2012.

Postretirement Health Care. EOG has postretirement medical and dental benefits in place for eligible United States and Trinidad employees and their eligible dependents, the costs of which are not material.