Employee Benefit Plans

Stock-Based Compensation

During 2015, 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 the EOG Resources, Inc. 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, 2015, 2014 and 2013 was as follows (in millions):



	2015		2014		2013

Lease and Well	$	44	$	41	$	35
Gathering and Processing Costs	1		1		1
Exploration Costs	26		27		27
General and Administrative	60		76		71
Total	$	131	$	145	$	134

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. At December 31, 2015, approximately 24.7 million common shares 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 2015, 2014 and 2013, EOG issued shares in connection with stock option/SAR exercises, restricted stock grants, restricted stock unit releases and ESPP purchases. EOG recognized, as an adjustment to APIC, federal income tax benefits of $26 million, $99 million and $56 million for 2015, 2014 and 2013, 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 seven 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 $56 million, $62 million and $53 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants for the years ended December 31, 2015, 2014 and 2013 were as follows:



	Stock Options/SARs									ESPP
	2015			2014			2013			2015			2014			2013

Weighted Average Fair Value of Grants	$	21.88		$	30.75		$	27.35		$	21.21		$	21.65		$	15.06
Expected Volatility	38.03		%	35.28		%	35.86		%	32.08		%	25.03		%	29.89		%
Risk-Free Interest Rate	0.83		%	0.95		%	0.78		%	0.12		%	0.08		%	0.11		%
Dividend Yield	0.85		%	0.61		%	0.40		%	0.73		%	0.46		%	0.60		%
Expected Life	5.3 years			5.2 years			5.5 years			0.5 years			0.5 years			0.5 years

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, 2015, 2014 and 2013 (stock options and SARs in thousands):



	2015				2014				2013
	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	10,493		$	64.96	10,452		$	54.43	12,438		$	42.91
Granted	2,037		69.99		2,146		101.55		2,268		83.70
Exercised ⁽¹⁾	(1,518	)	47.64		(1,718	)	45.68		(4,046	)	35.62
Forfeited	(268	)	80.31		(387	)	68.95		(208	)	50.78
Outstanding at December 31	10,744		67.98		10,493		64.96		10,452		54.43
Stock Options/SARs Exercisable at December 31	5,993		57.96		5,287		49.40		4,638		43.95


(1)	The total intrinsic value of stock options/SARs exercised during the years 2015, 2014 and 2013 was $60 million, $95 million and $151 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, 2015, there were 10.4 million stock options/SARs vested or expected to vest with a weighted average grant price of $67.52 per share, an intrinsic value of $52 million and a weighted average remaining contractual life of 4.1 years.

The following table summarizes certain information for the stock options and SARs outstanding and exercisable at December 31, 2015 (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⁾

$22.00 to $ 44.99	2,184	2	$	41.08			2,182	2	$	41.08
45.00 to 56.99	2,672	3	52.37				2,229	3	51.64
57.00 to 69.99	2,019	7	69.13				51	4	62.11
70.00 to 84.99	1,832	4	84.25				936	4	84.36
85.00 to 116.99	2,037	5	101.49				595	5	101.61
	10,744	4	67.98		$	117,424	5,993	3	57.96		$	107,950


(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, 2015, unrecognized compensation expense related to non-vested stock option and SAR grants totaled $100 million. This unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.8 years.

At December 31, 2015, approximately 568,000 shares of Common Stock remained available for issuance under the ESPP. The following table summarizes ESPP activities for the years ended December 31, 2015, 2014 and 2013 (in thousands, except number of participants):



	2015		2014		2013

Approximate Number of Participants	1,963		1,991		1,844
Shares Purchased	225		202		256
Aggregate Purchase Price	$	15,045	$	14,927	$	14,015

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 $69 million, $74 million and $72 million for the years ended December 31, 2015, 2014 and 2013, respectively.

The following table sets forth the restricted stock and restricted stock unit transactions for the years ended December 31, 2015, 2014 and 2013 (shares and units in thousands):



	2015				2014				2013
	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	5,394		$	64.39	7,358		$	49.54	7,636		$	45.53
Granted	1,044		77.94		1,132		98.72		1,294		76.04
Released ⁽¹⁾	(1,331	)	51.52		(2,761	)	105.24		(1,368	)	52.39
Forfeited	(199	)	74.56		(335	)	62.55		(204	)	48.55
Outstanding at December 31 ⁽²⁾	4,908		70.35		5,394		64.39		7,358		49.54


(1)	The total intrinsic value of restricted stock and restricted stock units released during the years ended December 31, 2015, 2014 and 2013 was $109 million, $291 million and $101 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 total intrinsic value of restricted stock and restricted stock units outstanding at December 31, 2015 and 2014 was approximately $347 million and $497 million, respectively.

At December 31, 2015, unrecognized compensation expense related to restricted stock and restricted stock units totaled $156 million. Such unrecognized expense will be recognized on a straight-line basis over a weighted average period of 2.5 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 810,000 performance units/shares could be outstanding (based on the number of performance units/shares outstanding as of December 31, 2015). Subject to the termination provisions set forth in the grant agreements and the applicable performance multiple, the grants of performance units/shares 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 $5 million, $9 million and $9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Weighted average fair values and valuation assumptions used to value performance unit and performance stock grants during the years ended December 31, 2015, 2014 and 2013 were as follows:



	2015			2014			2013

Weighted Average Fair Value of Grants	$	80.64		$	119.27		$	100.34
Expected Volatility	29.35		%	32.18		%	33.63		%
Risk-Free Interest Rate	1.07		%	1.18		%	0.79		%

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, 2015, 2014 and 2013 (units and shares in thousands):



	2015			2014			2013
	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	333	$	90.17	261	$	82.18	142	$	67.05
Granted	72	80.64		72	119.27		119	100.34
Outstanding at December 31 ⁽¹⁾	405	88.48		333	90.17		261	82.18


(1)	The total intrinsic value of performance units and performance stock outstanding at December 31, 2015 and 2014 was $29 million and $31 million, respectively.

At December 31, 2015, 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 3.3 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 $36 million, $41 million and $37 million for 2015, 2014 and 2013, respectively.

In addition, 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. These pension plans are available to most employees of the Trinidadian and United Kingdom subsidiaries. EOG's combined contributions to these plans were $1 million, $5 million and $4 million for 2015, 2014 and 2013, respectively.

For the Trinidadian defined benefit pension plan, the benefit obligation, fair value of plan assets and accrued benefit cost totaled $9 million, $7 million and $0.2 million, respectively, at December 31, 2015, and $14 million, $12 million and $1 million, respectively, at December 31, 2014. In connection with the divestiture of substantially all of its Canadian assets in the fourth quarter of 2014, EOG has elected to terminate the Canadian non-contributory defined benefit pension plan.

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.