Washington, D.C. 20549
PROXY STATEMENT
PROXY SUMMARY
This summary highlights information contained
in this Proxy Statement. This proxy summary does not contain all of the information you should consider, and you should read this
entire Proxy Statement before voting.
Corporate Responsibility
Some highlights of our sustainability and corporate
responsibility efforts appear below. Please visit https://www.anteromidstream.com/community-sustainability for more information
and a link to our most recent ESG report.
Human Capital
The largest contribution in making us a responsible
and sustainable company comes from our talented and experienced employees. We encourage our employees to embrace our values, and
work every day to make these values apparent in all that we do.
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The safety and security of our people and the
integrity of our operations are our top priorities. Our health and safety compliance program seeks to protect our workforce
and the communities in which we operate by setting a goal of zero incidents, zero harm, zero compromise. We have well developed
and thoughtful processes for identifying and mitigating safety risks: |
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Identification – behavior-based
safety programs, job safety analysis, emergency response drills and contractor vetting through a reputable third-party vendor
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Mitigation – contractor safety
improvement plans, root cause analyses, risk ranking/mitigation reviews for every project, pre-job safety startup reviews,
and a library of over 30 individual training courses |
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Our success as a company is not measured only by our financial results but also by how we treat our employees. We seek to help our people enjoy healthier lives, achieve educational goals, and pursue economic opportunities for themselves and their families by offering competitive compensation and benefits, including: |
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Healthcare coverage – medical and prescription, dental and vision |
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Financial assistance – health savings accounts, dependent care flexible spending account coverage and 401(k) plan with matching |
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Insurance – basic life, accidental death and disability, short-term disability and long-term disability coverage |
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Lifestyle – employee assistance program, holidays and personal choice days, paid vacation and sick leave, company-paid parental leave, subsidized gym memberships and free parking and public transportation |
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In response to the COVID-19 pandemic, and as further highlighted in our Annual Report on 10-K for the fiscal year ending December 31, 2021, we implemented significant changes that we believe to be in the best interest of our employees: |
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Having our office employees work from home to the extent they are able |
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Implementing additional safety measures, including required weekly or bi-weekly testing and other recommended public health measures for our field employees continuing critical on-site work |
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Continuing to monitor the COVID-19 environment in order to (i) protect the health and safety of our employees and contract workers and (ii) determine when a return to an in-office working arrangement will be appropriate |
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Doing the right thing is essential to our culture, and we communicate to our employees that it is essential to their, and our, long-term success. To that end, we conduct an annual, company-wide ethics and compliance training program that covers, among other things, ethical business practices, insider trading, and anti-discrimination and anti-harassment. |
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We respect human rights and promote them in our supply chain by, among other things, adhering to our internal policies, including: |
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Supplier Code of Conduct – promotes the fair and ethical treatment of suppliers, contractors, independent consultants and other parties that Antero Midstream works with through a set of guidelines focusing on equal opportunity, workplace safety, protection of the environment, compensation and protection of proprietary information and requires the protection of human rights and respect for freedom of association |
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Human, Labor and Indigenous Rights
Policy – promotes respect of human rights through compliance with applicable national and local laws as well as
pertinent trends and norms with respect to compensation, discrimination, health and safety, community and indigenous peoples;
prohibits child labor, forced labor and human trafficking; recognizes freedom of association; prohibits workplace harassment,
discrimination, and misuse of employer power, in line with applicable laws related to all of these topics; and provides
access to a hotline for reporting concerns or grievances |
Community Engagement
We are committed to enhancing the communities
in which we live and work. Recent highlights of our community engagement include:
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Together with Antero Resources Corporation (“Antero Resources”): |
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Maintained a Community Relations hotline and resolved over 98% of community relations inquiries submitted from 2020 to 2022 |
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Improved community infrastructure in West Virginia and Ohio through $259 million in improved road and infrastructure upgrades since 2013 |
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Donated $100,000 to WVU Medicine Children’s Hospital |
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Through the Antero Foundation, in 2021, Antero Midstream and Antero Resources: |
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1,284 |
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donated to philanthropic and community endeavors, including to food pantries and food banks in West Virginia and Ohio |
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community service hours logged
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Established an employer matching campaign to assist the Colorado communities affected by the Marshall fires |
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Contributed meaningful employment opportunities in the Appalachian Region |
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Donated much-needed funds and equipment to healthcare providers in response to the COVID-19 pandemic |
Diversity
We recognize the importance of supporting and
promoting diversity in our workplace. Our Diversity and Inclusion Policy promotes diversity and equal opportunity in the hiring
process by prohibiting all forms of unlawful discrimination based on age, race, ethnicity, religion, sex, gender identity and other
impermissible factors. In addition, we identify qualifications, attributes, and skills that are important to be represented on
the Board. We consider individuals of all backgrounds, skills and viewpoints when seeking employees and candidates for Board service.
As set forth in our Diversity and Inclusion Policy
and our Nominating & Governance Committee Charter, we view diversity broadly to include diversity of backgrounds, skills
and viewpoints as well as traditional diversity concepts such as race, gender, national origin, religion or sexual orientation
or identity. In 2022, we amended our Diversity and Inclusion Policy and our Nominating and Governance Committee Charter to require
that each pool of candidates to be considered to fill a vacancy on the Board shall include at least one individual who would be
considered diverse based on traditional diversity concepts.
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Pursuant to our Diversity and Inclusion Policy,
we expect recruiters to continue to provide us with a diverse pool of candidates, and our hiring process
considers the value of diversity. We monitor employee metrics in areas such as gender and ethnicity.
In January 2022, Yvette K. Schultz was promoted
to be an executive officer, to serve as our Chief Compliance Officer, Senior Vice President—Legal, General Counsel and Secretary.
We have also recently promoted several other women to be officers, including to serve as Chief Accounting Officer and Senior Vice
President—Accounting, Senior Vice President—Operations, Senior Vice President—Geology and Vice President—Production.
As of December 31, 2021:
23% |
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of our employees are women |
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out of seven independent directors are women |
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of our directors, senior vice presidents, and vice presidents are women |
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Governance
Our Board has ultimate oversight over the company’s operational
performance and ethical conduct. This includes, in partnership with our executive leadership team, managing our risk mitigation
and ESG efforts. Highlights of our corporate governance program include:
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Director independence and Board composition |
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Seven out of nine directors are independent |
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We have an independent lead director |
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Each Board committee is chaired by an independent director |
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Our Nominating & Governance Committee is comprised entirely of independent directors |
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The ages of our directors range from 47 to 71 years old, and the average director tenure is three years |
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We have an ESG Committee of the Board that guides and governs our ESG initiatives |
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We have an ESG Advisory Council, made up of leaders from across the organization, that develops a centralized, systematic approach for identifying, managing and communicating ESG risks and opportunities |
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A portion of executive compensation is tied to ESG performance |
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100% of employees completed training for our Human, Labor and Indigenous Rights Policy, our Diversity and Inclusion Policy and our Supplier Code of Conduct |
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Valuing investor feedback and alignment with stockholders |
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We proactively engage
with stockholders and other stakeholders regarding ESG performance |
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Our executive compensation program and robust stock ownership guidelines applicable to directors and executives were thoughtfully designed to incentivize the maximization of shareholder value and promotion of ESG performance |
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Our corporate policies generally prohibit hedging or pledging company stock |
Environment and Safety(1)
We believe safety and environmental stewardship are intrinsically
linked. Our goal of Zero incidents, Zero harm, Zero compromise empowers every employee to make the safest decisions to protect
our people and the planet. Our dedicated staff of environmental professionals manage our health, safety, security and preservation
of the environment (“HSSE”) programs and are committed to our performance as a safe and sustainable energy company.
In addition, stewardship of the environment is a fundamental value in our overall business strategy. Highlights of our 2021 HSSE
program include:
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Data retrieved from Antero Midstream’s and Antero Resources’
2020 ESG Reports or calculated from the 2020 ESG Reports and public disclosures. Antero Resources’ and Antero Midstream’s
emission intensity is based on the total GHG emissions reported to the EPA under Subpart W of the Greenhouse Gas Reporting
Rule Program. Antero Resources’ and Antero Midstream’s methane leak loss rate performance is derived from average
data derived from OneFuture. GHG intensity includes companies’ midstream and/or downstream operations. |
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- 2022 Proxy Statement 6 |
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98%
of the fresh water used by Antero Resources was transferred by Antero Midstream pipeline,
eliminating approximately 32 million miles of truck traffic and avoiding approximately
14,000 metric tons of carbon dioxide emissions |
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86%
of flowback and produced water gathered was reused or recycled |
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have one of the lowest methane leak loss rates in the industry at 0.015% |
Our
employees completed 4,900 health and safety training hours |
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Our ESG disclosure standards are aligned with those of the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures |
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We announced goals to achieve a 100% reduction in pipeline emissions by 2025 and to achieve Net Zero Scope 1 (direct) and Scope 2 (indirect from the purchase of energy) emissions by 2050 through implementation of emission reduction practices and technologies and the purchase of carbon credits |
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We continue to be
an industry leader with one of the lowest rates for both lost time injuries and OSHA recordable injuries, achieving a lost
time incident rate of 0.061 for employees and contractors in 2020 |
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We provided regulatory compliance programs and workshops for contractors |
We are an active member of the U.S. EPA Natural
Gas STAR program, ONE Future, The Environmental Partnership, and the Colorado State University’s Methane Emissions Technology
Evaluation Center. Our participation in these organizations and programs provides us with information and resources as we continue
our efforts to reduce GHG emissions.
Enhanced Corporate Governance
In 2019, we significantly enhanced shareholder
rights and our corporate governance practices. In March of 2019, equity holders of Antero Midstream Partners LP (“AMLP”)
and Antero Midstream GP LP (“AMGP”) approved proposals to combine the two companies and convert the resulting company
from a limited partnership into a corporation. The transaction and resulting governance structure was approved by the boards of
directors and conflicts committees of both AMLP and AMGP, was recommended by both ISS and Glass Lewis and was overwhelmingly approved
by equity holders of AMLP and AMGP. In connection with the transaction, our shareholders overwhelmingly approved a proposal to
convert from a limited partnership to a corporation and adopt a certificate of incorporation that enhanced shareholders’
rights. Approximately 99% of votes cast were in favor of converting from a limited partnership to a corporation and adopting our
current certificate of incorporation. While the certificate of incorporation approved by shareholders contains provisions for a
classified board of directors and a supermajority vote for certain amendments, at the time ISS recommended shareholders vote for
the conversion and adoption of the certificate of incorporation, noting that support for the proposal was warranted in part due
to the valuable governance protections and enhanced rights that shareholders would experience.
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Investor Outreach
Antero Midstream and the Board value input from stockholders, and
we are committed to maintaining an open dialogue to receive feedback on important items. In 2021, we met with stockholders to discuss
governance-related issues, including environmental and social matters.
Executive Compensation Highlights
Below is a summary of key components and decisions regarding our executive
compensation program for 2021:
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Long-term incentive compensation awards vest over periods of several years to reward sustained Antero Midstream performance over time. |
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Long-term compensation awards for our Named Executive Officers increased in 2021 due to the Company’s continued financial improvement and desire to incentivize long-term performance. |
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Executive
compensation is in part tied to a qualitative assessment of ESG performance by the Compensation Committee, with input from
the ESG Committee, where appropriate, which will include non-financial performance goals to: |
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Continue progress towards meeting our 2025 climate goals |
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Demonstrate leading safety performance compared to industry peers |
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Reduce the number of reportable spills |
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Provide a safe environment for our employees and contractors as we navigate the challenges of the Covid-19 pandemic |
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Enhance reporting on company community engagement and relations efforts |
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Conduct a climate risk analysis as required by the Taskforce on Climate-related Financial Disclosures |
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Create an inter-departmental ESG Advisory Council to manage ESG challenges and opportunities throughout the organization |
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Require employee training requirements with respect to the following company policies: Human Labor and Indigenous Rights; Diversity and Inclusion; Supplier Code of Conduct |
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The annual incentive plan for 2021 included metrics we felt were key to value creation. These included free cash flow after dividends, leverage goals, return on invested capital and ESG goals. We are proud of our results with a payout of 173% of target. The full details of our annual incentive plan metrics, goals and results are shown on page 41 of the proxy. |
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Base salary levels for the Named Executive Officers were increased in 2021 to target median base salary levels for similarly situated executives in the peer group. |
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Each of the Named Executive Officers is employed at-will and none of the Named Executive Officers is party to an employment agreement, severance agreement or change in control agreement. |
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- 2022 Proxy Statement 9 |
2022 Annual Meeting of Stockholders
We are pleased this year to conduct the Annual
Meeting solely online via the Internet through a live webcast and online stockholder tools. We are conducting the Annual Meeting
virtually because we believe a virtual format makes it easier for stockholders to attend and participate. Moreover, this format
empowers stockholders around the world to participate at no cost.
Here are several ways our virtual format will
enhance stockholder access and participation and protect stockholder rights:
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We Encourage Questions. Stockholders can submit questions for the meeting online in advance or live during the meeting, following the instructions below. During the meeting, we will answer as many appropriate stockholder-submitted questions as time permits. Following the Annual Meeting, we will publish an answer to each appropriate question we received on our Investor Relations website at www.anteromidstream.com/investors as soon as practical. |
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We Believe in Transparency. Although the live webcast is available only to stockholders at the time of the meeting, we will post a webcast replay, the final report of the inspector of election, and answers to all appropriate questions asked by stockholders in connection with the Annual Meeting to our Investor Relations website at www.anteromidstream.com/investors. |
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We Proactively Take Steps to Facilitate Your Participation. During the Annual Meeting, we will offer live technical support for all stockholders attending the meeting. |
Meeting Admission
You are entitled to attend and participate in
the virtual Annual Meeting only if you were a stockholder as of the close of business on April 18, 2022 or if you hold a valid
proxy for the Annual Meeting. If you are not a stockholder, you may still view the meeting after the recording has been posted
on our Investor Relations website.
Attending Online.
If you plan to attend the Annual Meeting online, please read the instructions below so you understand how to gain
admission. If you do not comply with these procedures, you will not be able to participate in the Annual Meeting.
Stockholders may participate in the Annual Meeting
by visiting www.virtualshareholdermeeting.com/AM2022. If you are a stockholder of record, you will need he control number on your
Notice of Internet Availability (the “Notice”) or proxy card to log in. For beneficial stockholders who do not have
a control number, instructions to gain access to the meeting may be provided on the voting instruction card you receive from your
broker, bank, or other nominee.
Stockholders of record hold shares directly with
American Stock Transfer and Trust Company LLC.
“Beneficial” or “street name”
stockholders hold shares through a broker, bank, or other nominee.
Please allow ample time to check in to the virtual
meeting. The site will be available beginning at 7:45 A.M. Mountain Time. We will have technicians ready to assist if you have
difficulties accessing or participating in the virtual meeting at (844) 986-0822 (if you are in the U.S.) or (303) 562-9302 (if you
are outside the U.S.).
Asking Questions.
Stockholders who wish to submit a question in advance may do so on our Annual Meeting website, www.virtualshareholdermeeting.
com/AM2022, which will be open 15 minutes before the Annual Meeting. Stockholders also may submit questions live during the meeting.
We plan to reserve up to 20 minutes for appropriate stockholder questions to be read and answered by Company personnel during the
meeting, but we will only address questions that are germane to the matters being voted on at our Annual Meeting. Stockholders
can also access copies of this Proxy Statement and annual report at our Annual Meeting website.
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Voting Before or During the Meeting
Whether you are a stockholder of record or a beneficial stockholder,
you may direct how your shares are voted without participating in the Annual Meeting. We encourage stockholders to vote well before
the Annual Meeting, even if they plan to attend. If you are a registered stockholder as of the record date, you may vote your shares
or submit a proxy to have your shares voted by one of the following methods:
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Online. Submit a proxy electronically using the website listed on the Notice. You will need the control number from your Notice to log on to the website. Internet voting facilities will be available until 11:59 p.m., Mountain Time, on Monday, June 6, 2022. |
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By Telephone. Request the proxy materials and submit a proxy by telephone using the toll-free number listed on the Notice. You will need the control number from your Notice when you call. Telephone voting facilities will be available until 11:59 p.m., Mountain Time, on Monday, June 6, 2022. |
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By Mail. You may request a hard copy proxy card by following the instructions on the Notice. You can submit your proxy by signing, dating and returning your proxy card in the provided pre-addressed envelope. |
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In Person Online. If you are a registered stockholder and you attend the Annual Meeting online, you can vote via the Internet during the meeting. Follow the instructions at www.virtualshareholdermeeting.com/AM2022 to vote during the meeting. |
If you are a beneficial stockholder, you will receive instructions
from the holder of record that you must follow for your shares to be voted. Most banks and brokers offer Internet and telephone
voting. If you do not give voting instructions, your broker will not be permitted to vote your shares on any matter that comes
before the Annual Meeting except the ratification of our auditors.
As of the record date, 478,256,108 shares of common stock were outstanding
and entitled to be voted at the Annual Meeting. Holders of shares of our 5.5% Series A Non-Voting Perpetual Preferred Stock (the
“Series A Preferred Stock”) are not entitled to vote such shares at the Annual Meeting.
Revoking Your Proxy or Changing Your Vote. Stockholders of record may revoke their proxy at any time before the
electronic polls close by submitting a later-dated vote via the Internet, by telephone or by mail; by delivering instructions to
our Secretary before the Annual Meeting commences; or by voting online in person during the Annual Meeting. Simply attending the
meeting will not affect a vote that you have already submitted.
Beneficial stockholders may revoke any prior voting instructions by
contacting the broker, bank, or other nominee that holds their shares prior to the Annual Meeting or by voting online during the
meeting.
Cautionary Note Regarding Forward-Looking Statements
This Proxy Statement includes “forward-looking
statements.” Such forward-looking statements are subject to a number of risks and uncertainties, many of which are not under
Antero Midstream’s control. All statements, except for statements of historical fact, made in this Proxy Statement regarding
activities, events or developments Antero Midstream expects, believes or anticipates will or may occur in the future, such as
statements regarding Antero Midstream’s ability to achieve its Net Zero goals, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking
statements speak only as of the date hereof. Although Antero Midstream believes that the plans, intentions and expectations reflected
in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations
will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in
such statements. Except as required by law, Antero Midstream expressly disclaims any obligation to and does not intend to publicly
update or revise any forward-looking statements.
In addition, many of the standards and metrics used in preparing this
Proxy Statement and the 2020 ESG Report continue to evolve and are based on management expectations and assumptions believed to
be reasonable at the time of preparation but should not be considered guarantees. The standards and metrics used, and the expectations
and assumptions
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- 2022 Proxy Statement 11 |
they are based on, have not been verified by
any third party. In addition, while we seek to align these disclosures with the recommendations of various third-party frameworks,
such as the Task Force on Climate-Related Financial Disclosures, we cannot guarantee strict adherence to these framework recommendations.
Additionally, our disclosures based on these frameworks may change due to revisions in framework requirements, availability of
information, changes in our business or applicable governmental policy, or other factors, some of which may be beyond our control.
The calculation of methane leak loss rate disclosed in the 2020 ESG Report is based on ONE Future protocol, which is based on the
EPA Greenhouse Gas Reporting Program. With respect to its pipeline emissions goal, Antero Midstream anticipates achieving a 100%
reduction in pipeline emissions by 2025 and Net Zero Scope 1 and Scope 2 emissions through 2050 through operational efficiencies
and the purchase of carbon offsets; however, such goals are aspirational and we could face unexpected material costs as a result
of our efforts to meet these goals. Moreover, given uncertainties related to the use of emerging technologies, the state of markets
for and availability of verified quality carbon offsets, we cannot predict whether or not we will be able to meet these goals in
a timely fashion, if at all. Scope 1 emissions are the Company’s direct greenhouse gas emissions, and Scope 2 emissions are the
Company’s indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat or cooling.
This Proxy Statement and the ESG Report contain
statements based on hypothetical or severely adverse scenarios and assumptions, and these statements should not necessarily be
viewed as being representative of current or actual risk or forecasts of expected risk. These scenarios cannot account for the
entire realm of possible risks and have been selected based on what we believe to be a reasonable range of possible circumstances
based on information currently available to us and the reasonableness of assumptions inherent in certain scenarios; however, our
selection of scenarios may change over time as circumstances change. While future events discussed in this Proxy or the ESG Report
may be significant, any significance should not be read as necessarily rising to the level of materiality of certain disclosures
included in Antero Midstream’s SEC filings. The goals discussed in this Proxy Statement are aspirational; we could face unexpected
material costs as a result of our efforts to meet these goals and may ultimately meet such goals through the purchase of offsets
or credits and not reductions in our actual GHG emissions. Moreover, given uncertainties related to the use of emerging technologies,
the state of markets for and the availability of verified quality carbon offsets, we cannot predict whether or not we will be able
to meet these goals in a timely fashion, if at all. Moreover, with regards to our participation in, or certification under, various
frameworks, we may incur certain costs associated with such frameworks and cannot guarantee that such participation or certification
will have the intended results on our or our products’ ESG profile
Antero Midstream cautions you that these
forward-looking statements are subject to all the risks and uncertainties incident to our business, most of which are
difficult to predict and many of which are beyond Antero Midstream’s control. These risks include, but are not limited
to, the risks described under the heading “Item 1A. Risk Factors” in Antero Midstream’s Annual Report on
Form 10-K for the year ended December 31, 2021.
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ITEM ONE: ELECTION OF DIRECTORS
The Board is currently comprised of
nine directors, divided into three classes. Directors in each class are elected to serve for three-year terms and until they
are re-elected, their successors are elected and qualified, or they resign or are removed. Each year, the directors of one
class stand for re-election as their terms of office expire. Ms. Robeson will not stand for re-election at the 2022 Annual
Meeting. Accordingly, Ms. Robeson’s term as a member of the Board will expire immediately prior to the 2022 Annual
Meeting, at which time the size of the Board will be reduced from nine to eight directors. The Board expresses its gratitude
to Ms. Robeson for her many contributions during five years of service on the Board. Based on recommendations from our
Nominating & Governance Committee, the Board has nominated the following individuals for election as Class III directors
of Antero Midstream with terms to expire at the 2025 Annual Meeting of Stockholders, barring an earlier resignation or
removal:
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Paul M. Rady |
David H. Keyte |
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Biographical information for the nominees is contained in “Directors”
and “Executive Officers” below.
The Board has no reason to believe that any of its nominees will
be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, either
the size of the Board will be reduced or the individuals acting under your proxy will vote for the election of a substitute nominee
recommended by the Board.
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THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE ELECTION OF EACH OF THE DIRECTOR NOMINEES. |
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- 2022 Proxy Statement 13 |
Summary of Director Qualifications and Experience
We recognize the importance of diversity on our Board. Pursuant
to our Diversity and Inclusion Policy and the Nominating and Governance Committee Charter, we view diversity broadly to include
diversity of backgrounds, skills and viewpoints as well as traditional diversity concepts such as race, gender, national origin,
religion or sexual orientation or identity. The Board believes that all directors should have sound business judgment, personal
and professional integrity, an ability to work as part of a team, willingness to commit the required time to serve as a Board
member, business experience, and financial literacy. The Nominating & Governance Committee considers diversity along with
other factors when reviewing director candidates, and in 2022, we amended our Diversity and Inclusion Policy and our Nominating
and Governance Committee Charter to require that each pool of candidates to be considered to fill a vacancy on the Board shall
include at least one individual who would be considered diverse based on traditional diversity concepts such as race, gender,
national origin, religion, or sexual orientation or identity.
The Board embodied a diverse set of experiences, qualifications,
attributes, and skills, as shown below for our directors and director nominees:
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Dea |
Keenan |
McArdle |
Kennedy |
Klimley |
Mollenkopf |
Rady |
Keyte |
Robeson |
Executive Leadership |
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Accounting/Audit |
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Risk Management |
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Human Resources Management |
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Gender Diversity |
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- 2022 Proxy Statement 14 |
DIRECTORS
We were originally formed in 2013 as Antero Resources Midstream
Management LLC to become the general partner of Antero Midstream Partners LP. In 2017, Antero Resources Midstream Management LLC
converted from a limited liability company to a limited partnership under the laws of the State of Delaware, and changed its name
to Antero Midstream GP LP in connection with its initial public offering. In March 2019, Antero Midstream GP LP was converted
from a limited partnership to a corporation under the laws of the State of Delaware and changed its name to Antero Midstream Corporation.
Other than Messrs. Keyte and Kennedy and Ms. McArdle, who were appointed to the Board in April 2019, April 2021 and March 2020,
respectively, each of our existing directors was appointed to the Board in connection with the closing of the simplification transactions
(the “Simplification Transactions”) in March 2019.
Set forth below is the background, business experience, attributes,
qualifications and skills of each Antero Midstream director and director nominee.
Paul M. Rady and David H. Keyte are up for reelection at the
Annual Meeting.
Class I Directors
Age: 68
Director Since:
2019
Committee Memberships:
Compensation Committee, Conflicts Committee
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Peter
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Key Skills, Attributes and Qualifications:
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Co-Founder
and Executive Chairman of Confluence Resources LP, since the company’s inception in September 2016
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Co-Founder,
President and CEO of Cirque Resources LP since its inception in May 2007
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President, CEO and Director of Western Gas Resources, Inc. from 2001 through their merger with Anadarko Petroleum Corporation
in 2006
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CEO and Chairman of the Board of Barrett Resources Corporation from 1999 and 2000, respectively, until its sale in 2001 to
Williams Companies
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Served as
a director of the general partner of Antero Midstream GP LP from April 2018 through the closing of the Simplification
Transactions
Has more than 36 years of oil and gas exploration
and production experience and involvement in national and state energy policies
Other Public Company Boards:
•
Ovintiv Corporation;
Liberty Oilfield Services
|
|
- 2022 Proxy Statement 15 |
Age: 71
Director Since:
2019
Committee Memberships:
Compensation Committee, Nominating & Governance Committee
|
|
W.
Howard Keenan, Jr. |
|
Key Skills, Attributes and Qualifications:
•
Since 1997,
has been a Member of Yorktown Partners LLC, a private investment manager focused on the energy industry
•
From 1975
to 1997, was in the Corporate Finance Department of Dillon, Read & Co. Inc. and active in the private equity and energy
areas, including the founding of the first Yorktown Partners fund in 1991
•
Serves on
the boards of directors of multiple Yorktown Partners portfolio companies
•
Serves on
the Board of Directors of Antero Resources
•
Served as
a director of the general partner of Antero Midstream GP LP beginning in April 2017 and as a director of the general partner
of Antero Midstream Partners LP beginning in February 2014, in each case, through the closing of the Simplification Transactions
Has over 40 years of experience with energy companies
and investments and broad knowledge of the oil and gas industry.
Other Public Company Boards:
•
Solaris Oilfield
Infrastructure, Inc.; Aris Water Solutions; Antero Resources; Brigham Minerals, Inc. (until January 2022); Ramaco Resources,
Inc. (until June 2019); Concho Resources (until 2013); Geomet Inc. (until 2012)
|
Age: 61
Director Since:
2020
Committee
Memberships:
Audit Committee, Environmental, Social and Governance
(ESG) Committee
|
|
Janine
J. McArdle |
|
Key Skills, Attributes and Qualifications:
•
Founder and
Chief Executive Officer of Apex Strategies, LLC, a global consultancy company providing advisory services to midstream
and downstream energy companies, since 2016
•
Executive
of Apache Corporation from 2002 to 2015 serving most recently as Senior Vice President – Gas Monetization
•
Served as
President and Managing Director for Aquila Europe Ltd. from 2001 to 2002 and served in various executive and trading roles
prior thereto
Has over 30 years of experience as an executive in
the oil and gas industry with extensive background in engineering, marketing, business development, finance and
risk management.
Other Public Company Boards:
•
Santos Ltd;
Halcon Resources Corporation (until 2019)
|
|
- 2022 Proxy Statement 16 |
Class II Directors
Age: 47
Director Since:
2021
Committee Memberships:
Environmental, Social and Governance (ESG) Committee
|
|
Michael
N. Kennedy |
|
Key Skills, Attributes and Qualifications:
•
Currently
serves as Senior Vice President—Finance of Antero Midstream and Chief Financial Officer and Senior Vice President—Finance
of Antero Resources Corporation
•
Served as
Chief Financial Officer of Antero Midstream from the closing of the Simplification Transactions in March 2019 until April
30, 2021, prior to which Mr. Kennedy served as Chief Financial Officer and Senior Vice President of Finance of the general
partner of Antero Midstream GP LP beginning in April 2017 and as Chief Financial Officer and Senior Vice President of
Finance of the general partner of Antero Midstream Partners LP beginning in February 2014
•
Served as Antero Resources’ Senior Vice President of Finance beginning in January 2016, prior to which he served as Vice President of Finance beginning in August 2013
•
Served as Executive Vice President and Chief Financial Officer of Forest Oil Corporation from 2009 to 2013 and served in various
financial positions prior thereto
•
Served as
an auditor with Arthur Andersen, focusing on the Natural Resources industry
Has significant experience as Former Chief Financial
Officer and current Senior Vice President of Finance of Antero Midstream, together with his broad knowledge and
experience in the industry.
Other Public Company Boards:
•
N/A
|
Age: 65
Director Since:
2019
Committee Memberships:
Nominating & Governance Committee (chair), Environmental,
Social and Governance (ESG) Committee (chair), Audit Committee
|
|
Brooks
J. Klimley |
|
Key Skills, Attributes and Qualifications:
•
President
of Brooks J. Klimley & Associates, an energy advisory services firm focused on corporate strategy, governance and
finance for public and private energy, power and infrastructure companies
•
Adjunct Professor
of Finance and Economics at Columbia University’s School of International and Public Affairs teaching “Energy
and Power Financing Markets: The Quest for Sustainable Development”
•
From 2013
to 2019, served as Managing Director and Head of Energy & Natural Resources at The Silverfern Group
•
Over 30 years
of experience leading investment banking and private equity practices focused on the energy and natural resources sectors
•
Served as
a director of the general partner of Antero Midstream GP LP beginning in 2017, and as a director of the general partner
of Antero Midstream Partners LP from March 2015 to 2017, in each case, through the closing of the Simplification Transactions
Has significant experience in the public and private
upstream and midstream oil and gas industry.
Other Public Company Boards:
•
N/A
|
|
- 2022 Proxy Statement 17 |
Age: 60
Director Since:
2019
Committee Memberships:
Audit Committee, Environmental, Social and Governance
(ESG) Committee
|
|
John
C. Mollenkopf |
|
Key Skills, Attributes and Qualifications:
•
Prior to his
retirement in 2016, served as Executive Vice President and Chief Operating Officer for MarkWest operations of MPLX GP
LLC
•
In 2002, was
one of five founders of MarkWest Energy Partners, L.P., and until 2015, served as Executive Vice President and Chief Operating
Officer
•
From 1996
to 2002, worked in various senior management roles for MarkWest Hydrocarbon, Inc.
•
From 1982
to 1996, worked for ARCO Oil and Gas Company in various roles in engineering and operations
•
Served as
a director of the general partner of Antero Midstream GP LP beginning in April 2017 through the closing of the Simplification
Transactions
Has significant experience in executive management,
business development, marketing, engineering and operations in the oil and gas industry.
Other Public Company Boards:
•
N/A
|
Class III Directors
Age: 68
Director Since:
2019
Chairman, Chief Executive Officer and
President Committee Memberships:
None
|
|
Paul
M. Rady |
|
Key Skills, Attributes and Qualifications:
•
Currently
serves as Chairman, Chief Executive Officer and President of Antero Midstream and Antero Resources
•
Served as
Chief Executive Officer and Chairman of Antero Midstream since the closing of the Simplification Transactions, prior to
which Mr. Rady served as (i) Chief Executive Officer of the general partner of Antero Midstream GP LP beginning in January
2017; (ii) as Chairman of the board of directors of such entity beginning in April 2017; and (iii) as Chief Executive
Officer and Chairman of the board of directors of the general partner of Antero Midstream Partners LP beginning in February
2014
•
Co-founder
of Antero Resources Corporation, serving as Chairman of the Board of Directors and Chief Executive Officer of Antero Resources
since May 2004
•
Served as
Chief Executive Officer and Chairman of Antero Resources Corporation’s predecessor company from its founding in
2002 to its ultimate sale to XTO Energy, Inc. in 2005
•
Served as
President, CEO and Chairman of Pennaco Energy from 1998 until its sale to Marathon in 2001
•
Worked with
Barrett Resources Corporation from 1990 until 1998, moving from Chief Geologist; to Exploration Manager; EVP Exploration;
President, COO and Director; and ultimately CEO
•
Began his
career with Amoco Corporation, where he served ten years as a geologist focused on the Rockies and Mid-Continent
Has significant experience as a chief executive of
oil and gas companies, together with his training as a geologist and broad industry knowledge.
Other Public Company Boards:
•
Antero Resources
|
|
- 2022 Proxy Statement 18 |
Age: 66
Director Since:
2019
Committee Memberships:
Compensation Committee (chair), Conflicts Committee (chair),
Nominating & Governance Committee
|
|
David
H. Keyte (Lead Director) |
|
Key Skills, Attributes and Qualifications:
•
Co-founder,
Chairman and Chief Executive Officer of Caerus Oil and Gas LLC since 2009
•
Former executive
of Forest Oil Corporation
Has significant experience in executive management
and finance in the oil and gas industry.
Other Public Company Boards:
•
Regal Entertainment
Group (until 2018)
|
Age: 61
Director
Since:
2019
Committee Memberships:
Audit Committee (chair), Nominating & Governance
Committee, Conflicts Committee
|
|
Rose
M. Robeson |
|
Key Skills, Attributes and Qualifications:
•
From 2012
to 2014, served as Senior Vice President & Chief Financial Officer of DCP Midstream GP, LLC
•
Previously
served as Group Vice President and Chief Financial Officer of DCP Midstream LLC from 2002 to 2012
•
Served as
a director of the general partner of Antero Midstream GP LP beginning in 2017 through the closing of the Simplification
Transactions
Has more than 30 years of experience in the oil and
gas industry, including exploration and production, midstream and marketing. Has significant financial management,
risk management and accounting oversight experience.
Other Public Company Boards:
•
SM Energy
Company; Newpark Resources Inc.; The Williams Companies; Tesco Corporation (until 2017); American Midstream Partners LP
(until 2016)
|
|
- 2022 Proxy Statement 19 |
EXECUTIVE OFFICERS
The table below sets forth the name, age and principal position
of each of our executive officers as of December 31, 2021. On December 31, 2021, Alvyn A. Schopp stepped down from his positions
as Chief Administrative Officer of Antero Midstream and Antero Resources. Mr. Schopp continues to serve the companies in a non-executive
officer role as Regional Senior Vice President of each company. On January 1, 2022, Yvette K. Schultz assumed a portion of the
responsibilities relinquished by Mr. Schopp and became an executive officer, to serve as Chief Compliance Officer, Senior Vice
President—Legal, General Counsel and Secretary of Antero Midstream and Antero Resources.
Name |
Age |
Principal Position |
Paul M. Rady |
68 |
Chairman of the Board, Chief Executive Officer and President |
Brendan E. Krueger |
37 |
Chief Financial Officer, Vice President – Finance and Treasurer |
Alvyn A. Schopp |
63 |
Chief Administrative Officer and Regional Senior Vice President |
Michael N. Kennedy |
47 |
Director and Senior Vice President—Finance |
W. Patrick Ash |
43 |
Senior Vice President—Reserves, Planning and Midstream |
Biographical information for Messrs. Rady and Kennedy is set
forth under “Directors” above. References to a position held by one of the below officers at “Antero”
means that the person held such position at Antero Resources Corporation, Antero Midstream, the general partner of Antero Midstream
GP LP, and the general partner of Antero Midstream Partners LP, as applicable.
Brendan E. Krueger has served as Antero Midstream’s
Chief Financial Officer since April 2021. Mr. Krueger has also served as Antero’s Vice President – Finance since April
2018. In addition to his current role, he has served as Antero’s Treasurer since December 2019. Mr. Krueger previously served
as Antero’s Finance Director from 2016 to 2018 and Antero’s Finance Manager from 2014 to 2016. Prior to joining Antero,
Mr. Krueger spent seven years as an investment banker focused on equity and debt financing and mergers and acquisition advisory
with Robert W. Baird & Co., Wells Fargo Securities, and A.G. Edwards, Inc. from 2007 through 2014. Mr. Krueger earned his
Bachelor of Business Administration in finance from the University of Notre Dame.
Alvyn A. Schopp currently serves as Antero’s Regional
Senior Vice President, prior to which he served as Antero’s Chief Administrative Officer and Regional Senior Vice President
beginning in January 2020, prior to which he served as Antero’s Chief Administrative Officer, Regional Senior Vice President
and Treasurer beginning in February 2014. Mr. Schopp has also served as Antero’s Vice President of Accounting and Administration
and Treasurer from January 2005 to September 2013, as Antero’s Controller and Treasurer from 2003 to 2005 and as Vice President
of Accounting and Administration and Treasurer of Antero’s predecessor company from January 2005 until its sale to XTO Energy,
Inc. in April 2005. From 1993 to 2000, Mr. Schopp was CFO, Director and ultimately CEO of T-Netix, Inc. From 1980 to 1993 Mr.
Schopp was with KPMG. As a Senior Manager with KPMG, he maintained an extensive energy and mining practice. Mr. Schopp holds a
B.B.A. from Drake University.
W. Patrick Ash has served as Antero’s Senior Vice
President – Reserves, Planning & Midstream, since June 2019, prior to which he served as Vice President of Reservoir
Engineering and Planning beginning in December 2017. Prior to joining us, Mr. Ash was at Ultra Petroleum Corp. (“Ultra”)
for six years in management positions of increasing responsibility, most recently serving as Vice President, Development, including
during and after Ultra’s bankruptcy proceedings in 2016, from which it emerged in 2017. In this position he led the reservoir
engineering, geoscience, and corporate engineering groups. From 2001 to 2011, Mr. Ash served in engineering roles at Devon Energy
Corporation, NFR Energy LLC and Encana Corporation. Mr. Ash holds a B.S. in Petroleum Engineering from Texas A&M University
and a M.B.A. from Washington University in St. Louis.
|
- 2022 Proxy Statement 20 |
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Antero Midstream’s sound governance practices and policies
provide an important framework to assist the Board in fulfilling its duties to stockholders. The Corporate Governance Guidelines
include provisions concerning the following:
• |
qualifications, independence, responsibilities, tenure, and compensation of directors; |
• |
background (including skills, experience and viewpoint) and diversity (including race, gender, national origin, religion,
and sexual orientation or identity) of directors, pursuant to Antero’s Diversity and Inclusion Policy; |
• |
service on other boards; |
• |
director resignation process; |
• |
role of the Chairman of the Board and the Lead Director; |
• |
meetings of the Board and of the independent directors; |
• |
interaction between the Board and outside parties; |
• |
annual performance reviews of the Board; |
• |
director orientation and continuing education; |
• |
attendance at meetings of the Board and the Annual Meeting; |
• |
stockholder communications with directors; |
• |
committee functions, committee charters, and independence; |
• |
director access to independent advisors and management; and |
• |
management evaluation and succession planning. |
The Corporate Governance Guidelines are available on Antero Midstream’s
website at www.anteromidstream.com in the “Governance” subsection of the “Investors” section. The
Nominating & Governance Committee reviews the Corporate Governance Guidelines periodically and as necessary, and any proposed
additions or amendments are presented to the Board for its approval.
Director Independence
Rather than adopting categorical
standards, the Board assesses director independence on a case-by-case basis, in each case consistent with applicable legal
requirements and the listing standards of the New York Stock Exchange (NYSE). After reviewing all relationships each director
has with Antero Midstream, including the nature and extent of any business relationships, as well as any significant
charitable contributions Antero Midstream makes to organizations where directors serve as board members or executive
officers, the Board has affirmatively determined that none of the directors have material relationships with Antero Midstream
and all of them are independent as defined by NYSE listing standards except Mr. Rady, Antero Midstream’s Chief
Executive Officer and President, and Mr. Kennedy, Antero Midstream’s Senior Vice President of Finance.
|
7 of 9
Directors are Independent
|
|
|
- 2022 Proxy Statement 21 |
Board Leadership Structure
Antero Midstream does not have a formal policy addressing whether
the roles of Chairman of the Board and Chief Executive Officer should be separate or combined. The directors serving on the Board
have considerable professional and industry experience, significant experience as directors of both public and private companies,
and a unique understanding of the challenges and opportunities Antero Midstream faces. Accordingly, the Board believes it is in
the best position to evaluate Antero Midstream’s needs and to determine how best to organize its leadership structure to
meet those needs at any given time.
At present, the Board has chosen to combine the positions of
Chairman and Chief Executive Officer. The Board believes the current Chief Executive Officer is the individual with the necessary
experience, commitment, and support of the other members of the Board to effectively carry out the role of Chairman. Mr. Rady
brings valuable insight to the Board due to the perspective and experience he has gained as our Chief Executive Officer and as
one of our founders. As the principal executive officer since our inception, Mr. Rady has unparalleled knowledge of our business
and operations. As a significant stockholder, Mr. Rady is invested in our long-term success. In addition, the Board believes that
combining the roles of Chairman and Chief Executive Officer at the present time promotes strong alignment of strategic development
and execution, effective implementation of strategic initiatives, and clear accountability for Antero Midstream’s success.
Because seven of the nine directors are independent under NYSE rules, the Board believes this leadership structure does not impede
independent oversight of Antero Midstream.
The Nominating & Governance Committee reviews this leadership
structure every year. Subject to the terms of the Stockholders’ Agreement, the Board believes it is important to retain
the flexibility to determine whether the roles of Chairman and Chief Executive Officer should be separated or combined.
Election of Lead Director
To facilitate candid discussion among Antero Midstream’s
directors, the non-management directors meet regularly in executive sessions.
The Corporate Governance Guidelines permit the Board, on the
recommendation of the Nominating & Governance Committee, to choose a Lead Director to preside at these executive sessions.
Mr. Keyte has served in this role since 2019, chairing executive sessions of the non-management directors and establishing the
agenda for these meetings. As the Lead Director, Mr. Keyte joins the Chairman in providing leadership and guidance to the Board.
How Director Nominees Are Selected
Renominating Incumbent Directors
Subject to the terms of the Stockholders’ Agreement, before
recommending to the Board that an existing director be nominated for reelection at the annual meeting of stockholders, the Nominating & Governance Committee will review and consider the director’s:
• |
past Board and committee meeting attendance and performance; |
• |
length of Board service; |
• |
personal and professional integrity, including commitment to Antero Midstream’s core values; |
• |
relevant experience, skills, qualifications and contributions to the Board; and |
• |
independence under applicable standards. |
The Nominating & Governance Committee is responsible for
assessing the appropriate balance of skills and characteristics required of Board members.
|
- 2022 Proxy Statement 22 |
Appointing New Directors and Filling Vacancies
The Board believes that all directors should have sound business
judgment, personal and professional integrity, an ability to work as part of a team, willingness to commit the required time to
serve as a Board member, business experience, and financial literacy. The Nominating & Governance Committee considers diversity
along with other factors when reviewing director candidates.
For information regarding the experiences, qualifications, attributes,
and skills of the current members of our Board, please see “Proxy Summary—Summary of Director Qualifications and Experience.”
The Nominating & Governance Committee will treat informal
recommendations for directors that are received from Antero Midstream’s stockholders in the same manner as recommendations
received from any other source. The Nominating & Governance Committee and the Board will also consider the benefits of all
aspects of diversity, and will consider whether, and if so how, to identify new candidates for Board service and when identifying
potential new Board members or filing a vacancy on the Board, commits to seeking out diverse candidates to the extent possible.
In 2022, we amended our Diversity and Inclusion Policy and our Nominating and Governance Committee Charter to require that each
pool of candidates to be considered to fill a vacancy on the Board shall include at least one individual who would be considered
diverse based on traditional diversity concepts such as race, gender, national origin, religion, or sexual orientation or identity.
|
- 2022 Proxy Statement 23 |
Board’s Role in Risk Oversight
In the normal course of its business, Antero Midstream is exposed
to a variety of risks, including its ability to execute its business strategy, competition, governmental regulations, interest
rate risks, and credit and investment risk, as well as risks relating to Antero Resources’ ability to meet its drilling
and development plan. At least annually, our Board receives updates from management regarding information security, cyber security
and data security risks in connection with Antero Midstream’s Enterprise Risk Management program. The Board and each committee
has distinct responsibilities for monitoring other risks, as shown below.
The Board of Directors |
The Board oversees Antero Midstream’s strategic
direction. To that end, the Board considers the potential rewards and risks of Antero Midstream’s
business opportunities and challenges, and it monitors the development and management of
risks that impact our strategic goals. |
Audit Committee
The Audit Committee monitors the effectiveness of Antero
Midstream’s systems of financial reporting, auditing and internal controls, as well as related legal and regulatory
compliance matters.
|
Nominating &
Governance Committee
The Nominating & Governance Committee oversees the
management of risks associated with Board organization, membership and structure; succession planning for our directors
and executive officers; and corporate governance.
|
Compensation Committee
The Compensation Committee oversees Antero Midstream’s
compensation policies and practices.
|
Environmental, Social
and Governance (ESG) Committee
The
Environmental, Social and Governance (ESG) Committee provides guidance to the Board on, and oversees Antero Midstream’s
risk management policies related to, corporate citizenship, environmental sustainability, and social and political trends,
issues and concerns. The ESG Committee regularly receives reports from management on pertinent ESG risks or opportunities,
including climate related topics.
|
Conflicts Committee
The Conflicts
Committee assists the Board in investigating, reviewing and evaluating potential conflicts of interest, including those between
Antero Midstream and Antero Resources. |
Board and Committee Self-Evaluations
The Board believes that a robust and constructive evaluation
process is an essential component of Board effectiveness and good corporate governance. To that end, the Board and each of its
standing committees conducts an annual self-assessment to evaluate their performance, composition, and effectiveness, and to identify
areas for improvement.
These evaluations take the form of wide-ranging and candid discussions.
The Lead Director facilitates discussions evaluating the full Board, and the committee chairs facilitate discussions regarding
their respective committees.
|
- 2022 Proxy Statement 24 |
Majority Vote Director Resignation Policy
Directors are elected by a plurality of votes cast in an uncontested
election. The Corporate Governance Guidelines require that an incumbent director who fails to receive the required number of votes
for reelection must tender a resignation. The Nominating & Governance Committee will act on an expedited basis to determine
whether to accept any such resignation, and will submit its recommendation for prompt consideration by the Board. The Board expects
the director whose resignation is under consideration to abstain from participating in this decision. The Nominating & Governance
Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
Meetings
The Board held twelve meetings in 2021. The then-serving outside
directors held four executive sessions. No director attended fewer than 75% of the meetings of the Board and of the committees
of the Board on which that director served during the respective time he or she served, except Mr. Dea who attended 71% of such
meetings.
Directors are encouraged to attend the Annual Meetings of Stockholders.
All of the then-serving members of the Board attended the 2021 Annual Meeting.
How to Contact the Board
General Communications
Stockholders and other interested parties may communicate with
us by writing to Antero Midstream Corporation, 1615 Wynkoop Street, Denver, Colorado 80202. Stockholders may submit their thoughts
to the Board, any committee of the Board, or individual directors on a confidential or anonymous basis by sending the communication
in a sealed envelope marked “Stockholder Communication with Directors” and clearly identifying the intended recipient(s).
Antero Midstream’s Chief Compliance Officer and Secretary
will review and forward each communication, as soon as reasonably practicable, to the addressee(s) if the communication falls
within the scope of matters generally considered by the Board. To the extent the subject matter of a communication is appropriate
and relates to matters that have been delegated by the Board to a committee other than the addressee(s) or to an executive officer,
the Chief Compliance Officer and Secretary also may forward the communication to the applicable officer or committee chair.
Legal or Compliance Concerns
Information regarding legal or compliance concerns may be submitted
confidentially and anonymously, although Antero Midstream may be obligated by law to disclose the information or identity of the
person providing the information in connection with government or private legal actions and in other circumstances. Antero Midstream’s
policy is not to take any adverse action, and not to tolerate any retaliation, against any person for asking questions or making
good faith reports of possible violations of law, Antero Midstream’s policies or our Corporate Code of Business Conduct
and Ethics.
|
- 2022 Proxy Statement 25 |
Insider Trading Policy
Antero Midstream’s Insider Trading Policy, which applies
to all employees, officers, and directors, prohibits hedging of Antero Midstream securities and engaging in any other transactions
involving Antero Midstream-based derivative securities, regardless of whether the covered person is in possession of material,
non-public information. The policy does not affect the vesting of securities acquired pursuant to Antero Midstream’s incentive,
retirement, stock purchase, or dividend reinvestment plans, or other transactions involving purchases and sales of company securities
between a covered person and Antero Midstream. Antero Midstream’s Insider Trading Policy also prohibits purchasing Antero
Midstream common stock, par value $0.01 per share (“Antero Midstream Common Stock”), on margin (e.g., borrowing money
to fund the stock purchase) and pledging Antero Midstream securities.
Available Governance Materials
The following materials are available on Antero Midstream’s
website at www.anteromidstream.com under “Investors” and then “Governance—Governance Documents.”
• |
Certificate of Incorporation of Antero Midstream |
• |
Bylaws of Antero Midstream |
• |
Charters of the Audit Committee, the Compensation Committee, the Nominating & Governance Committee, and the Environment,
Sustainability and Social Governance Committee; |
• |
Corporate Code of Business Conduct and Ethics; |
• |
Financial Code of Ethics; |
• |
Corporate Governance Guidelines; |
• |
Human, Labor and Indigenous Rights Policy; |
• |
Diversity and Inclusion Policy; |
• |
Supplier Code of Conduct; |
• |
Whistleblower Policy; and |
• |
Political Advocacy Policy. |
Stockholders may obtain a copy, free of charge, of any of these
documents by sending a written request to Antero Midstream Corporation, 1615 Wynkoop Street, Denver, Colorado, 80202. Any amendments
to Antero Midstream’s Corporate Code of Business Conduct and Ethics will be posted in the “Governance” subsection
of our website.
BOARD COMMITTEES
General
The Board had five standing committees in 2021: the Audit Committee,
the Compensation Committee, the Nominating & Governance Committee, the Conflicts Committee and the Environmental, Social and
Governance (ESG) Committee. The charters of the Audit Committee, Compensation Committee, Nominating & Governance Committee
and Environmental, Social and Governance (ESG) Committee are available on Antero Midstream’s website at www.anteromidstream.com
in the “Governance—Governance Documents” subsection of the “Investors” section.
The Board creates ad hoc committees on an as-needed basis. There
were no ad hoc committees in 2021.
|
- 2022 Proxy Statement 26 |
Audit
Committee |
|
|
Current Members:
Rose M. Robeson (chair)*
Brooks J. Klimley
Janine J. McArdle**
John C. Mollenkopf
Number of meetings
in 2021:
5
|
|
The Audit Committee oversees, reviews, acts on, and reports
to the Board on various auditing and accounting matters, including:
•
the selection
of Antero Midstream’s independent accountants,
•
the scope
of annual audits,
•
fees to be
paid to the independent accountants,
•
the performance
of Antero Midstream’s independent accountants, and
•
Antero Midstream’s
accounting practices.
In addition, the Audit Committee oversees Antero Midstream’s
compliance with legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters.
The Board has determined that all members of the Audit
Committee meet the heightened independence standards applicable to audit committee members prescribed by rules of the
NYSE and the Securities and Exchange Commission (“SEC”). In addition, the Board believes Ms. Robeson is an
“audit committee financial expert” as defined in SEC rules.
|
* |
Immediately prior to the Annual Meeting, Mr. Keyte is expected to join the Audit Committee as its
chair. |
** |
Janine J. McArdle joined the
Audit Committee on September 17, 2021. |
Compensation
Committee |
Current Members:
David H. Keyte (chair)
Peter A. Dea*
W. Howard Keenan, Jr.
Number of meetings in 2021:
6
|
|
The Compensation Committee establishes salaries, incentives
and other forms of compensation for our executive officers. The Compensation Committee also administers Antero Midstream’s
incentive compensation and benefit plans, and reviews and recommends to the Board for approval the compensation of our
non-employee directors.
The Board has determined that all members of the Compensation
Committee meet the NYSE’s heightened requirements applicable to compensation committee members, and also meet the
heightened independence requirements under SEC rules and the tax code. No Antero Midstream executive officer serves on
the board of directors of a company that has an executive officer who serves on the Board.
|
* |
Peter A. Dea joined the Compensation Committee, and Janine J. McArdle stepped down from the Compensation Committee, on September
17, 2021. |
|
- 2022 Proxy Statement 27 |
Nominating & Governance Committee |
Current Members:
Brooks J. Klimley (chair)
W. Howard Keenan, Jr.*
David H. Keyte
Rose M. Robeson
Number of meetings
in 2021:
4
|
|
The Nominating & Governance Committee identifies,
evaluates and recommends qualified nominees to serve on the Board, develops and oversees Antero Midstream’s internal
corporate governance processes, and directs all matters relating to the succession of Antero Midstream’s Chief Executive
Officer.
The Board has determined that all members of the Nominating
& Governance Committee meet the NYSE’s independence standards.
|
* |
W. Howard Keenan, Jr. joined the
Nominating & Governance Committee on September 17, 2021. |
Conflicts Committee |
Current Members:
David H. Keyte (chair)
Peter A. Dea
Rose M. Robeson
Number of meetings
in 2021:
2
|
|
The Conflicts Committee assists the Board in investigating, reviewing and evaluating certain potential
conflicts of interest, including those between Antero Midstream and Antero Resources, and carries out any other duties delegated
by the Board that relate to potential conflict matters. |
Environmental, Social and Governance (ESG) Committee |
Current Members:
Brooks J. Klimley (chair)
Michael N. Kennedy*
Janine J. McArdle
John C. Mollenkopf
Number of meetings
in 2021:
4
|
|
The Environmental, Social and Governance (ESG) Committee provides guidance to the Board on, and oversees Antero Midstream’s risk management policies related to corporate citizenship, environmental sustainability, and social and political trends, issues and concerns. The ESG Committee also advises the Board and management on significant public policy issues that are pertinent to the Company and its stakeholders.
Members of the ESG Committee have expertise in areas relating to ESG, including environmental stewardship, social responsibility
and community relations. Brooks Klimley, the ESG Committee Chair, brings ESG experience from his career leading investment
banking practices covering the energy and mining sectors. Mr. Klimley also serves as an Adjunct Professor at Columbia University’s
graduate schools of business and international affairs. Janine McArdle has more than 30 years of experience in engineering,
marketing, business development, finance and risk management. John Mollenkopf has significant experience in executive management,
business development, marketing, engineering and operations in the midstream energy sector. Michael Kennedy was an auditor
with Arthur Andersen focusing on the Natural Resources industry.
During 2021, the ESG Committee reviewed the Company’s ESG practices and procedures. Following such review, the Company published its 2020 ESG Report, which is available at www.anteromidstream.com/community-sustainability. |
* |
Michael N. Kennedy joined the Environmental, Social and Governance (ESG)
Committee on September 17, 2021. |
|
- 2022 Proxy Statement 28 |
COMPENSATION OF DIRECTORS
General
Our non-employee directors are entitled to receive compensation
consisting of retainers, fees and equity awards as described below. The Compensation Committee reviews non-employee director compensation
periodically and recommends changes, if appropriate, to the Board for approval.
Our employee directors do not receive additional
compensation for their services as directors. All compensation received from Antero Midstream as employees is disclosed in the
Summary Compensation Table on page 50.
Annual Cash Retainers
Effective April 15, 2021, some of the annual retainers payable
to non-employee directors of the Board were increased slightly, as indicated below. These modifications were made to ensure that
our director compensation is competitive with that paid by our peers so that we can attract and retain qualified individuals to
serve on our Board.
Recipient | |
Amount | |
Non-employee director | |
$ | 90,000 | |
Lead Director | |
$ | 25,000 | |
Audit Committee: | |
| | |
Chairperson | |
$ | 24,000 (previously $20,000) | |
Other members | |
$ | 15,000 (previously $7,500) | |
Compensation, Nominating & Governance, and ESG Committees: | |
| | |
Chairperson | |
$ | 15,000 | |
Other members | |
$ | 7,500 (previously $5,000) | |
Conflicts Committee: | |
| | |
Chairperson | |
$ | 7,500 (previously $5,000) | |
Other members | |
$ | 7,500 (previously $5,000) | |
All retainers are paid in cash on a quarterly basis in arrears,
but directors have the option to elect, on an annual basis, to receive all or a portion of their cash retainers in the form of
shares of our common stock.
Effective April 15, 2022, the annual retainer for non-employee
directors will be increased from $90,000 to $97,500. Otherwise, the compensation for our non-employee directors will be the same
in 2022 as that described for 2021.
|
- 2022 Proxy Statement 29 |
Equity-Based Compensation
In addition to cash compensation, our non-employee directors
receive annual equity-based compensation consisting of fully-vested stock with an aggregate grant date value equal to $130,000,
subject to the terms and conditions of the Antero Midstream Corporation Long Term Incentive Plan (“AM LTIP”) and the
agreements pursuant to which such awards are granted. These awards are granted in arrears on a quarterly basis, so each installment
has a grant date fair value of approximately $32,500.
Fees
For 2021, the directors who are members of Board committees were
eligible to receive a fee of $1,500 for each committee meeting attended in excess of ten meetings for such committee per calendar
year (up to a maximum of $22,500 per committee). Directors are also reimbursed for reasonable expenses incurred to attend meetings
and activities of the Board or its committees, and to attend and participate in general education and orientation programs for
directors.
Stock Ownership Guidelines
Under our stock ownership guidelines, within five years of being
elected or appointed to the Board or five years from the adoption of the policy, whichever is later, a non-employee director,
other than Mr. Keenan, is required to own shares of our common stock with a fair market value equal to at least five times the
amount of the annual cash retainer. These stock ownership guidelines are designed to align our directors’ interests more
closely with those of our stockholders. The guidelines were adopted less than five years from the measurement date in 2021. As
a result, each of our non-employee directors still has additional time remaining to achieve compliance with the stock ownership
guidelines. For information regarding stock ownership guidelines applicable to our executive officers, please see “Compensation
Discussion and Analysis—Other Matters—Stock Ownership Guidelines.”
2021 Non-Employee Director Compensation
The following table provides information concerning the compensation
of our non-employee directors for the fiscal year ended December 31, 2021.
Name | |
Fees Earned or Paid in Cash ($)(1) | |
Stock Awards ($)(2) | |
Total
($) |
Peter A. Dea | |
| 100,625 | | |
| 129,983 | | |
| 230,608 | |
W. Howard Keenan, Jr. | |
| 100,625 | | |
| 129,983 | | |
| 230,608 | |
David H. Keyte | |
| 143,750 | | |
| 129,983 | | |
| 273,733 | |
Brooks J. Klimley | |
| 133,125 | | |
| 129,983 | | |
| 263,108 | |
John C. Mollenkopf | |
| 110,000 | | |
| 129,983 | | |
| 239,983 | |
Janine J. McArdle | |
| 107,500 | | |
| 129,983 | | |
| 237,483 | |
Rose M. Robeson | |
| 126,750 | | |
| 129,983 | | |
| 256,733 | |
(1) |
Includes annual cash retainer, committee fees, committee chair fees and meeting fees earned during
fiscal 2021. |
(2) |
Amounts in this column reflect the aggregate grant date fair value of shares granted under the AM LTIP to each non-employee
director during fiscal year 2021, computed in accordance with the rules of Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (“FASB ASC Topic 718”). See Note 12 to our consolidated financial statements
on Form 10-K for the year ended December 31, 2021, for additional detail regarding assumptions underlying the value of these
equity awards. |
|
- 2022 Proxy Statement 30 |
ITEM TWO: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected KPMG LLP as Antero
Midstream’s independent registered public accounting firm for the year ending December 31, 2022. KPMG LLP has audited Antero
Midstream’s and its predecessor’s financial statements since 2016 as well as the financial statements of Antero Midstream
Partners LP since 2013. The Audit Committee annually evaluates the accounting firm’s qualifications to continue to serve
Antero Midstream. In evaluating the accounting firm, the Audit Committee considers the reputation of the firm and the local office,
the industry experience of the engagement partner and the engagement team, and the experience of the engagement team with clients
of similar size, scope and complexity as Antero Midstream. The Audit Committee is directly involved in the selection of the new
engagement partner when rotation is required every five years in accordance with SEC rules. KPMG LLP completed the audit of Antero
Midstream’s annual consolidated financial statements for the year ended December 31, 2021, on February 16, 2022.
The Board is submitting the selection of KPMG LLP for ratification
at the Annual Meeting. The submission of this matter for ratification by stockholders is not legally required, but the Board and
the Audit Committee believe the ratification proposal provides an opportunity for stockholders to communicate their views about
an important aspect of corporate governance. If our stockholders do not ratify the selection of KPMG LLP, the Audit Committee
will reconsider, but will not be required to rescind, the selection of that firm as Antero Midstream’s independent registered
public accounting firm.
Representatives of KPMG LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement, and are expected to be available to respond to appropriate
questions.
The Audit Committee has the authority and responsibility to retain,
evaluate and replace Antero Midstream’s independent registered public accounting firm. Stockholder ratification of the appointment
of KPMG LLP does not limit the authority of the Audit Committee to change Antero Midstream’s independent registered public
accounting firm at any time.
|
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF KPMG LLP AS ANTERO MIDSTREAM’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE
YEAR ENDING DECEMBER 31, 2022. |
|
- 2022 Proxy Statement 31 |
AUDIT MATTERS
The material in this report is not “soliciting
material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under
the Securities Act of 1933, as amended (the “Securities Act”) or the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language
in such filing.
Audit Committee Report
Pursuant to its charter, the Audit Committee’s
principal functions include: (i) overseeing the accounting and financial reporting process of Antero Midstream and audits of Antero
Midstream’s financial statements (ii) the appointment, compensation, retention and oversight of the work of the independent
auditors hired for the purpose of issuing an audit report or performing other audit, review or attest services for Antero Midstream;
(iii) pre-approving audit or non-audit services proposed to be rendered by Antero Midstream’s independent registered public
accounting firm; (iv) annually reviewing the qualifications and independence of the independent registered public accounting firm’s
engagement partner and other senior personnel who are providing services to Antero Midstream; (v) reviewing with management and
the independent registered public accounting firm Antero Midstream’s annual and quarterly financial statements, earnings
press releases, and financial information and earnings guidance provided to analysts and ratings agencies; (vi) approving or ratifying
certain related party transactions as set forth in Antero Midstream’s Related Persons Transactions Policy; (vii) reviewing
with management Antero Midstream’s major financial risk exposures; (viii) assisting the Board in monitoring compliance with
legal and regulatory requirements relating to financial, accounting, auditing and related compliance matters; (ix) preparing the
report of the Audit Committee for inclusion in Antero Midstream’s proxy statement; and (x) annually reviewing and reassessing
its performance and the adequacy of its charter.
While the Audit Committee has the responsibilities
and powers set forth in its charter, and Antero Midstream’s management and the independent registered public accounting firm
are accountable to the Audit Committee, it is not the duty of the Audit Committee to plan or conduct audits or to determine that
Antero Midstream’s financial statements and disclosures are complete and accurate and in accordance with generally accepted
accounting principles and applicable laws, rules and regulations.
In performing its oversight role, the Audit Committee
has reviewed and discussed Antero Midstream’s audited financial statements with management and the independent registered
public accounting firm. The Audit Committee also has discussed with the independent registered public accounting firm the matters
required to be discussed by the applicable standards and regulations of the Public Company Accounting Oversight Board (the “PCAOB”).
The Audit Committee has received the written disclosures and the written statement from the independent registered public accounting
firm required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit
Committee concerning independence. The Audit Committee also has considered whether the provision of non-audit services by the independent
registered public accounting firm to Antero Midstream is compatible with maintaining the firm’s independence, and has discussed
with the independent registered public accounting firm its independence.
Based on the reviews and discussions described
in this Audit Committee Report, and subject to the limitations on the roles and responsibilities of the Audit Committee referred
to herein and in its charter, the Audit Committee recommended to the Board that Antero Midstream’s audited financial statements
for the year ended December 31, 2021, be included in the Form 10-K, which was filed with the SEC on February 16, 2022.
Members of the Audit Committee*:
Rose M. Robeson (Chairman)
Brooks J. Klimley
Janine J. McArdle
John C. Mollenkopf
* |
Includes all members of the Audit Committee as of the time the Audit Committee Report was
approved for inclusion in this Proxy Statement. |
|
- 2022 Proxy Statement 32 |
Audit and Other Fees
The table below sets forth the aggregate fees
and expenses billed by KPMG LLP for the last two fiscal years to Antero Midstream (in thousands):
| |
For the Years Ended
December 31, |
| |
2020 | | |
2021 |
Audit Fees(1) | |
| | | |
| |
Audit and Quarterly Reviews | |
$ | 724 | | |
$ | 672 |
Other Filings | |
| — | | |
| — |
SUBTOTAL | |
| 724 | | |
| 672 |
Audit-Related Fees(2) | |
| 200 | | |
| 135 |
Tax Fees | |
| — | | |
| — |
All
Other Fees | |
| — | | |
| — |
TOTAL | |
$ | 924 | | |
$ | 807 |
(1) |
Includes (a) the audit of Antero Midstream’s annual consolidated financial statements
included in the Annual Report on Form 10-K and internal controls over financial reporting and review of Antero Midstream’s
quarterly financial statements included in Quarterly Reports on Form 10-Q, and (b) the audit of the financial statements of
Antero Midstream Partners LP. |
(2) |
Represents fees related to review of Antero Midstream’s other filings, including
filings related to the Simplification Transactions, with the SEC, including review and preparation of registration statements,
comfort letters and consents. |
The charter of the Audit Committee and its pre-approval
policy require the Audit Committee to review and pre-approve the independent registered public accounting firm’s fees for
audit, audit-related, tax and other services. The Chairman of the Audit Committee has the authority to grant pre-approvals up to
a certain limit, provided such approvals are within the pre-approval policy and are ratified by the Audit Committee at a subsequent
meeting. For the year ended December 31, 2021, the Audit Committee approved all of the services described above.
|
- 2022 Proxy Statement 33 |
ITEM THREE: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Our policies are conceived with the intention
of attracting and retaining highly qualified individuals capable of contributing to the creation of value for our stockholders.
Our compensation program for 2021 was designed to be competitive with market practices and to align the interests of our Named
Executive Officers with those of Antero Midstream and its stockholders.
Stockholders are urged to read the Compensation
Discussion and Analysis section of this Proxy Statement, which discusses how our compensation design and practices reflect our
compensation philosophy for calendar year 2021. The Compensation Committee and the Board believe that our compensation practices
for 2021 were effective in implementing our guiding principles.
Pursuant to Section 14A of the Exchange Act,
we are submitting this annual proposal to our stockholders for an advisory vote to approve the compensation of our Named Executive
Officers. This proposal, commonly known as a “say-on-pay” proposal, gives stockholders the opportunity to express their
views on the compensation of our Named Executive Officers for 2021. This vote is not intended to address any specific item of compensation,
but rather the overall compensation of our Named Executive Officers for 2021 and the principles, policies and practices described
in this Proxy Statement. Accordingly, the following resolution is submitted for stockholder vote at the Annual Meeting:
“RESOLVED,
that the stockholders of Antero Midstream Corporation approve, on an advisory basis, the compensation of its named executive officers
during 2021 as disclosed in the proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the Securities
and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and other related tables
and disclosures.”
As this is an advisory vote, the result is not likely to affect previously granted compensation. The Compensation
Committee will consider the outcome of the vote when evaluating our compensation practices going forward.
|
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT. |
|
- 2022 Proxy Statement 34 |
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides details on the
following matters:
• |
Our 2021 say-on-pay advisory vote; |
• |
Our 2021 executive compensation program and the compensation awarded under that program; |
• |
Material actions taken with respect to our 2022 executive compensation program; and |
• |
Pertinent executive compensation policies. |
2021 Named Executive Officers
The table below sets forth the name and principal
position of each of our 2021 Named Executive Officers. Effective April 30, 2021, Glen C. Warren, Jr. retired as President, Chief
Financial Officer and Secretary of Antero Resources and President and Secretary of Antero Midstream. Mr. Warren also stepped down
from the boards of both companies as of the same date. Effective upon Mr. Warren’s retirement, (i) Paul M. Rady, then Chairman
and Chief Executive Officer of Antero Resources and Antero Midstream, was also named President of Antero Resources and Antero Midstream,
(ii) Michael N. Kennedy, then Senior Vice President of Finance at Antero Resources and Antero Midstream and Chief Financial Officer
of Antero Midstream, was named Chief Financial Officer of Antero Resources, ceased to be the Chief Financial Officer of Antero
Midstream and continues to serve as Senior Vice President of Finance of Antero Midstream and Senior Vice President of Finance of
Antero Resources and (iii) Brendan E. Krueger, then Vice President of Finance and Treasurer of Antero Resources and Antero Midstream,
was named Chief Financial Officer of Antero Midstream and continues to serve as Treasurer and Vice President of Antero Resources
and Antero Midstream. Also effective upon Mr. Warren’s retirement, Mr. Kennedy was appointed to the Board and elected for
a successive term by the Company’s stockholders at the 2021 Annual Meeting. Additionally, on December 31, 2021 Alvyn A. Schopp
stepped down from his position as Chief Administrative Officer of Antero Resources and Antero Midstream. Mr. Schopp continues to
serve the companies in a non-executive officer role as Regional Senior Vice President of both Antero Resources and Antero Midstream.
Name |
Principal Position |
Paul M. Rady |
Chairman of the Board, Chief Executive Officer and President |
Brendan E. Krueger |
Chief Financial Officer, Treasurer and Vice President—Finance |
Alvyn A. Schopp |
Chief Administrative Officer and Regional Senior Vice President |
Michael N. Kennedy |
Director and Senior Vice President—Finance and Former Chief Financial Officer |
W. Patrick Ash |
Senior Vice President—Reserves, Planning and Midstream |
Glen C. Warren, Jr. |
Former Director, President and Secretary |
2021 Say-on-Pay Advisory Vote
At the Company’s 2021 annual meeting, our
stockholders were asked to approve, on an advisory basis, the compensation of the Named Executive Officers. Advisory votes in favor
of our executive compensation program were cast by approximately 90% of the shares of common stock counted as present and entitled
to vote at such meeting. The Compensation Committee considered the results of the “Say-on-Pay” vote when evaluating
the compensation of the Named Executive Officers in 2021. We have continued, and plan to continue, seeking to engage in stockholder
outreach regarding executive compensation programs.
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- 2022 Proxy Statement 35 |
Compensation Philosophy and Objectives of Our Compensation Program
We seek to attract, retain, and motivate exceptional
executive talent by providing our executives with a competitive mix of fixed, time-based and performance-based compensation. Our
performance-based compensation program focuses on motivating returns and value creation per share, disciplined capital investment,
efficient operations, and generation of distributable cash flow. We believe our compensation philosophy and practices for 2021
promote a strong alignment between Named Executive Officer pay and Company performance, while providing our Compensation Committee
with the flexibility necessary to ensure that compensation was appropriate for this anomalous year.
Compensation Best Practices
Our Compensation Committee is committed to maintaining
compensation best practices and employing methods that motivate our executives to create long-term value while minimizing risk
to investors. The following table highlights the compensation best practices we followed during 2021 with respect to our Named
Executive Officers:
|
What We Do |
|
Target reasonable compensation levels relative to peers with a focus on performance-based and at-risk components |
|
Enforce robust minimum stock ownership guidelines |
|
Evaluate the risk of our compensation programs |
|
Use and review compensation tally sheets |
|
Engage an independent compensation consultant |
|
Maintain a clawback policy |
|
What We Don’t Do |
|
No tax gross ups for executive officers |
|
No severance arrangements for Named Executive Officers |
|
No guaranteed bonuses for Named Executive Officers |
|
No management contracts |
|
No granting stock options with an exercise price less than the fair market value of the Company’s common stock on the date of grant outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) |
|
No reduction of the exercise price of an outstanding stock option without stockholder approval outside of transactional context (e.g., substitution of pre-existing target company awards for Company awards in an acquisition) |
|
No hedging or pledging of Company stock |
|
No separate benefit plans for Named Executive Officers |
|
No excessive perquisites |
Implementing Our Compensation Program Objectives
Role of the Compensation Committee
The Compensation Committee oversees all elements
of our executive compensation program and has the final decision-making authority on all executive compensation matters. Each year,
the Compensation Committee reviews, modifies (if necessary), and approves the goals and objectives relevant to the compensation
of all Named Executive Officers, as well as the executive compensation program as a whole, including performance goals for the
annual cash incentive program, if applicable, and long-term equity awards. In addition, the Compensation Committee is responsible
for reviewing the performance of the
|
- 2022 Proxy Statement 36 |
Chief Executive Officer within the framework
of our executive compensation goals and objectives. Our Chief Executive Officer, together with (i) until Mr. Warren retired in
April of 2021, our President, and (ii) since Mr. Warren’s retirement, our Senior Vice President—Finance, review the
performance of the other Named Executive Officers. These evaluations are taken into account when setting the compensation for our
Named Executive Officers.
Actual compensation decisions for individual
officers are the result of a subjective analysis of a number of factors, including the individual officer’s role within our
organization, performance, experience, skills or tenure with us, changes to the individual’s position, and relevant trends
in compensation practices.
The Compensation Committee also considers a Named
Executive Officer’s current and prior aggregate compensation when setting future compensation. The Compensation Committee
determines whether adjustments to compensation are necessary to adopt emerging best practices, reflect Company performance, retain
each executive or provide additional or different performance incentives. Thus, the Compensation Committee’s decisions regarding
compensation are the result of the exercise of judgment based on all reasonably available information.
Role of the Antero Resources Compensation Committee and Allocation
of Compensation Expenses
Our Named Executive Officers provide services
to us and to Antero Resources. As a result, the Antero Resources Compensation Committee (the “AR Compensation Committee”)
holds portions of its meetings jointly with the Compensation Committee. During these joint meetings in Spring 2021, the Compensation
Committee and the AR Compensation Committee discussed and established each Named Executive Officer’s aggregate total compensation
for services provided to both companies, including base salary, aggregate total target annual cash incentive value, and aggregate
total target long-term incentive value. Performance metrics for each company’s annual cash incentive program, if applicable,
and the terms and provisions of all long-term incentive awards granted by each company are established separately by each of the
Compensation Committee and the AR Compensation Committee.
The percentage of all non-compensation general
and administrative expenses we reimburse to Antero Resources is calculated quarterly based on gross property and equipment, capital
expenditure and labor costs, the last of which is calculated based on an estimate of how much time our employees spend providing
services to Antero Midstream, in the aggregate, during each quarter (the “Reimbursement Percentage”). Antero Resources
pays all elements of cash compensation to, and provides all benefits for, our Named Executive Officers. The portion of each Named
Executive Officer’s base salary that we reimbursed for 2021 was calculated using the average Reimbursement Percentage for
each of the four quarters in 2021, which was 29% (the “2021 NEO AM Reimbursement Percentage”).
As has historically been our practice, at the
recommendation of our independent executive compensation consultant, our Compensation Committee and the AR Compensation Committee
met to ensure the aggregate value of long-term incentive awards at both companies combined to achieve an overall award level in
line with each company’s compensation philosophy. Each committee then separately approved the awards from their respective
company.
We also reimburse Antero Resources for the portion
of the cost of all health and welfare benefits, employer 401(k) contributions, and the limited perquisites Antero Resources provides
to our Named Executive Officers that are attributable to services provided to us. This amount is calculated as the product of the
total cost of such benefits and the 2021 NEO AM Reimbursement Percentage.
Consistent with the allocation of compensation
expense for our Named Executive Officers described above, unless otherwise indicated, the information included in this Compensation
Discussion and Analysis, as well as the tables that follow, only pertains to the compensation paid by us for services our Named
Executive Officers provided to us in 2021. For information regarding compensation paid to our Named Executive Officers for services
provided to Antero Resources in 2021, please see the Proxy Statement filed by Antero Resources on April 28, 2022.
|
- 2022 Proxy Statement 37 |
Role of Management
The Chief Executive Officer, together with (i)
until Mr. Warren retired in April of 2021, our President, and (ii) since Mr. Warren’s retirement, our Senior Vice President—Finance,
typically provide recommendations to the Compensation Committee and the AR Compensation Committee regarding the compensation levels
for the other Named Executive Officers and for our executive compensation program as a whole. In making their recommendations,
the Chief Executive Officer and the President or Senior Vice President—Finance, as applicable, consider each Named Executive
Officer’s performance during the year, the Company’s performance during the year, compensation levels of similarly
situated executives of companies with which we compete for executive talent, and independent oil and gas company compensation surveys.
The Compensation Committee, in joint discussion with the AR Compensation Committee, considers these recommendations when reviewing
the performance of, and setting compensation for, the other executive officers.
Role of External Advisors
The Compensation Committee has the authority
to retain an independent executive compensation consultant. For 2021, the Compensation Committee retained NFP Compensation Consulting
(“NFPCC”), formerly Longnecker & Associates. In compliance with the SEC and NYSE disclosure requirements, the Compensation
Committee reviewed the independence of NFPCC under six independence factors. After its review, the Compensation Committee determined
that NFPCC was independent.
In 2021, NFPCC:
• |
Collected and reviewed all relevant Company information, including our historical compensation data and our organizational structure; |
• |
With input from management, the Compensation Committee and the AR Compensation Committee, evaluated the peer group of companies to use for executive compensation comparisons and made recommendations regarding modifications; |
• |
Assessed our compensation program’s position relative to market for our Named Executive Officers and other vice presidents and relative to our stated compensation philosophy; |
• |
Prepared a report of its analysis, findings and recommendations for our executive compensation program; and |
• |
Completed other ad hoc assignments, such as helping with the design of incentive arrangements. |
NFPCC’s reports were provided to the Compensation
Committee and the AR Compensation Committee in 2021 and also used by Messrs. Rady and Warren in making their recommendations to
the Compensation Committee and the AR Compensation Committee.
Competitive Peer Analysis
When assessing the soundness of our compensation
programs, the Compensation Committee compares the pay practices for our Named Executive Officers against the pay practices of other
companies. This process recognizes our philosophy that our compensation practices should be competitive, though marketplace information
is only one of the many factors we consider.
Messrs. Rady and Warren, the Compensation Committee
and the AR Compensation Committee used market compensation data provided by NFPCC to assess the total compensation levels of our
Named Executive Officers relative to market. Market data is developed by comparing each executive officer’s compensation
with that of similarly situated officers of companies in the Peer Group (described below) and of E&P companies in general.
In determining whether an officer is similarly situated, we consider the specific responsibilities assumed by our executives and
executives at other organizations, and give greater weight to Peer Group data if a position appears comparable to the position
of one of our Named Executive Officers.
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- 2022 Proxy Statement 38 |
Peer Group
NFPCC recommended, and after evaluation and discussion
the AR Compensation Committee approved, a peer group for use in determining compensation for 2021 of onshore publicly traded oil
and gas companies that are reasonably similar to Antero Resources in terms of size and operations. Because aggregate total compensation
for our Named Executive Officers is set jointly by both the Compensation Committee and the AR Compensation Committee, a single
peer group is used for this joint analysis. Over two-thirds of the compensation our Named Executive Officers receives is for services
provided to Antero Resources. As a result, a peer group composed of peer companies of Antero Resources, rather than a peer group
composed of our peer companies, is used to establish total target compensation for our Named Executive Officers. The peer group
was modified in 2021 to remove each of: Parsley Energy, Inc., which was acquired by Pioneer Natural Resources Company on October
19, 2020; WPX Energy, Inc., which merged with Devon Energy on January 7, 2021; Chesapeake Energy Corporation, which filed for bankruptcy
on June 28, 2020; Gulfport Energy Corporation, which filed for bankruptcy on November 13, 2020; Noble Energy, Inc., which was acquired
by Chevron Corporation on October 5, 2020, and Oasis Petroleum, Inc., which had lower revenue and market capitalization metrics
than us. The following companies were added to the 2021 peer group because they met a majority of the screening metrics, including
key items such as revenue level, market capitalization and enterprise value: Ovintiv Inc., PDC Energy, Inc., Matador Resources
Company and QEP Resources, Inc. We refer to the following 14 companies as the “Peer Group”:
2021 APPROVED PEER GROUP
Company |
Ticker |
Cabot Oil and Gas Corporation* |
COG |
Cimarex Energy Co.* |
XEC |
CNX Resources Corporation |
CNX |
Continental Resources, Inc. |
CLR |
Devon Energy Corporation |
DVN |
EQT Corporation |
EQT |
Matador Resources |
MTDR |
Ovintiv Inc. |
OVV |
PDC Energy, Inc. |
PDCE |
QEP Resources, Inc. |
QEP |
Range Resources Corporation |
RRC |
SM Energy Company |
SM |
Southwestern Energy Company |
SWN |
Whiting Petroleum Corporation |
WLL |
* |
Cabot Oil and Gas Corporation merged with Cimarex Energy Co. on October 1, 2021 to create Coterra Energy Inc., which
is currently traded on the New York Stock Exchange under the ticker symbol CTRA. |
In addition to referencing the Peer Group companies
in structuring our 2021 compensation program, the Compensation Committee reviewed compensation paid by certain other midstream
companies to confirm the reasonableness of our compensation program as compared to other companies in our sector, but did not benchmark
compensation against this group of companies.
Positioning Versus Market
In determining compensation for 2021, the Compensation
Committee and the AR Compensation Committee determined that it was appropriate to target the median of the Peer Group for base
salaries, target annual cash incentive awards, and long-term equity-based incentive awards. As noted throughout this Compensation
Discussion and Analysis, target compensation is only one of many factors considered by the Compensation Committee and the AR Compensation
Committee when setting compensation levels for our Named Executive Officers.
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- 2022 Proxy Statement 39 |
Elements of Direct Compensation
Our Named Executive Officers’ compensation
for 2021 included the key components described below.
Pay Component |
|
Form of Pay |
|
How Amount is Determined |
|
Objective |
Base salary |
|
Cash |
|
Market-competitive amount that reflects the executive’s relative skills, responsibilities, experience and contributions |
|
Provide a minimum, fixed level of cash compensation |
Annual Incentive Awards |
|
Cash |
|
Free Cash Flow After Dividends, Net Debt / EBITDA Return on Invested Capital and ESG |
|
Encourage short-term financial and operational performance that is aligned with our business strategy and will lead to long-term stockholder value |
Long-term incentive awards |
|
Restricted stock units |
|
25% vests on each of the first four anniversaries of grant |
|
Provide a strong retention mechanism; alignment with stockholders since value is tied to stock price |
With respect to the compensation attributable
to services provided to us by our Named Executive Officers, the components of our Named Executive Officers’ compensation
for 2021, calculated based on amounts reported for 2021 in the Summary Compensation Table below, except that target annual incentive
levels are used rather than actual 2021 annual incentive award levels, were distributed as follows:
|
CEO Target Compensation |
|
Other NEOs’ Target Compensation*
(average) |
|
|
|
|
|
|
|
|
* |
Mr. Warren was excluded from this calculation as his partial year compensation was not representative of typical compensation for our President and Secretary. |
|
Base Salaries
Base salaries are designed to provide a minimum,
fixed level of cash compensation for services rendered during the year. In addition to providing a base salary that is competitive
with salaries paid by other independent oil and gas exploration and production companies, the Compensation Committee, in discussion
with the AR Compensation Committee, also considers whether our pay levels appropriately align each Named Executive Officer’s
base salary level relative to the base salary levels of our other officers. Our objective is to have base salaries that accurately
reflect each officer’s relative skills, experience and contributions to the Company. To that end, annual base salary adjustments
are based on a subjective analysis of many individual factors, including:
• |
the responsibilities of the officer; |
• |
the period over which the officer has performed those responsibilities; |
• |
the scope of, and level of expertise and experience required for the officer’s position; |
• |
the strategic impact of the officer’s position; and |
• |
the potential future contribution and demonstrated individual performance of the officer. |
In addition to the individual factors listed
above, the Compensation Committee, in discussion with the AR Compensation Committee, considers our overall business performance
and implementation of Company objectives when determining annual base salaries. While these metrics generally provide context for
making salary decisions, base salary decisions do not depend on attainment of specific goals or performance levels, and no specific
weighting is given to one factor over another.
Base salaries are reviewed annually, but are
not increased if the Compensation Committee, in discussion
|
- 2022 Proxy Statement 40 |
with the AR Compensation Committee, believes
that (1) our executives are currently compensated at proper levels in light of Company performance or external market factors,
or (2) an increase or addition to other elements of compensation would be more appropriate in light of our stated objectives.
As a result of external market factors, in February
2020, the Compensation Committee determined that no changes should be made to the Named Executive Officers’ base salaries
for the 2020 fiscal year. Accordingly, each Named Executive Officer was paid the same base salary in 2020 as he was paid in 2019.
Messrs. Rady has not, and prior to his retirement on April 30, 2021, Mr. Warren had not, received an increase in base salary since
2017. In March of 2021, the Compensation Committee and the AR Compensation Committee approved increases in base salary levels for
each of the Named Executive Officers in an effort to align their base salary levels roughly with the median base salary levels
for similarly situated executives at the Peer Group. The Compensation Committee also took into account the other factors listed
above and, as a result, the base salary level for some of the Named Executive Officers was above the median level and for some
it was below. The Compensation Committee further increased Mr. Kennedy’s base salary in connection with his appointment as
Chief Financial Officer of Antero Resources and Mr. Krueger’s base salary in connection with his appointment as Chief Financial
Officer of the Company, in each case, in April 2021 to reflect the increase in responsibility associated with their new positions.
The table below reflects the portion of the base
salary for each Named Executive Officer allocated to the Company for 2021. For additional information, see “Implementing
Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses”
above.
Executive Officer | |
Allocated Base Salary | | |
Percentage Change in Aggregate Base Salary from 2020 to 2021(1) | |
Paul M. Rady | |
$ | 287,100 | | |
| 15% | |
Brendan E. Krueger | |
$ | 89,900 | | |
| N/A(2) | |
Alvyn A. Schopp | |
$ | 145,000 | | |
| 5% | |
Michael N. Kennedy | |
$ | 147,900 | | |
| 28% | |
W. Patrick Ash | |
$ | 120,350 | | |
| 14% | |
Glen C. Warren, Jr. | |
$ | 65,008 | (3) | |
| 9%(4) | |
(1) |
The amount of base salary allocated to the Company changes from year
to year based on the NEO AM Reimbursement Percentage for that year. As a result, increases or decreases in the amount of base
salary allocated to the Company may not indicate an increase or decrease in the executive’s aggregate base salary. This
column indicates the increase in aggregate base salary paid to the Named Executive Officers for services provided to both
the Company and Antero Resources that was approved by both the Compensation Committee and the AR Compensation Committee. |
(2) |
Mr. Krueger was not a Named Executive Officer during 2020. |
(3) |
Represents the portion of the base salary earned by Mr. Warren from January
1, 2021 through April 30, 2021, when he retired from the Company, that was allocated to the Company. |
(4) |
Represents the percentage change in the base salary for 2020 as compared
to the base salary established by the Compensation Committee and the AR Compensation Committee in March of 2021. As a result
of Mr. Warren’s retirement, the actual value of the base salary paid to him in 2021 was substantially less than in prior
years. |
Annual Cash Incentive Awards
Purpose and Operation
Annual cash incentive payments, which we also
refer to as cash bonuses, are a key component of each Named Executive Officer’s annual compensation package. With the exception
of 2020, the annual incentive plan has historically been based on a balanced scorecard that is used to measure our performance.
In 2020, our Compensation Committee chose not to establish performance metrics because it felt that establishing meaningful performance
levels for each of the applicable metrics would be impossible given the unprecedented uncertainty surrounding the global COVID-19
pandemic. Instead, the Compensation Committee awarded fully discretionary annual bonuses for 2020. While uncertainty remained at
the beginning of 2021, the Compensation Committee felt the market and the energy industry had stabilized sufficiently to return
to the structure of our historic bonus program, which we believe motivates our Named Executive Officers to accomplish specific
objectives.
|
- 2022 Proxy Statement 41 |
The Compensation Committee, in discussion with
the AR Compensation Committee, adopted bonus targets for each of the Named Executive Officers, expressed as a percentage of base
salary. The Compensation Committee, in discussion with the AR Compensation Committee, elected to utilize the target bonus levels
from 2019 (no target bonus levels were established in 2020) without any increase. This determination was based in large part on
our compensation strategy of providing target level incentive compensation opportunities that are competitive with the market median.
Mr. Kennedy’s target bonus percentage was increased from 85% to 100% in June of 2021 as a result of his change in position.
The bonus targets for our Named Executive Officers for 2021 were as follows:
Executive Officer | |
Target Bonus (as a % of base salary) |
Paul M. Rady | |
| 120 | % |
Brendan E. Krueger | |
| 80 | % |
Alvyn A. Schopp | |
| 85 | % |
Michael N. Kennedy | |
| 100 | % |
W. Patrick Ash | |
| 85 | % |
Glen C. Warren, Jr. | |
| 100 | % |
2021 Performance Metrics
The Compensation Committee modified the maximum
payout opportunity from 150% of target, as was the case in 2019 (the most recent year during which target bonus amounts were established),
to 200% of target. Our Compensation Committee feels that this increase in the maximum possible payout under the annual incentive
plan is consistent with the annual bonus structures in place at the companies in our Peer Group and properly rewards exceptional
performance.
Antero Midstream’s 2019 cash incentive
program included a Distributable Cash Flow Per Share metric, a common metric utilized among limited partnerships. Since converting
from a limited partnership to a C-corporation structure in 2019, Antero Midstream now utilizes Free Cash Flow, a more common metric
utilized by C-corporations. Both of these metrics are used primarily as performance metrics to compare cash available to return
to shareholders.
This structure is intended to provide payout
levels that are consistent with our stockholders’ investment objectives, while remaining competitive with companies with
which we compete for executive talent.
In April of 2021 the Compensation Committee selected
the following metrics, weightings and performance levels for the 2021 annual cash incentive program.
Selected
Metrics Weighting Threshold Performance (50%) Target Performance (100%) Maximum (200%) Performance Score
(% of Target) Weighted Score Free Cash Flow after Dividends ($ Millions) 169.3% 42.3% Net Debt/EBITDA 180.4%
54.1% Return on Invested Capital 200% 60% ESG Qualitative Assessment 115% 17.3% Total
173.7%
|
- 2022 Proxy Statement 42 |
Metric |
|
Definition |
|
Rationale |
Free Cash Flow after Dividends |
|
Adjusted EBITDA less interest expense and accrual-based capital expenditures and dividends declared for the year, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 16, 2022. Adjusted EBITDA means Net Income plus interest expense, income tax expense, amortization of customer relationships, depreciation expense, impairment expense, loss on asset sale, loss on early extinguishment of debt, accretion of asset retirement obligations, equity-based compensation expense, excluding equity in earnings of unconsolidated affiliates, plus distributions from unconsolidated affiliates, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 16, 2022 and our Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 16, 2022. |
|
Generating Free Cash Flow after Dividends is essential to ensure Antero Midstream can internally finance capital investments, support return of capital to shareholders and maintain a strong balance sheet. |
Net Debt/EBITDA |
|
Year end 2021 Net Debt divided by 2021 full year adjusted EBITDA. Net Debt is calculated as consolidated total debt, excluding unamortized debt premiums and debt issue costs, less cash and cash equivalents, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 16, 2022. |
|
Managing the balance sheet and leverage is essential for efficiently growing the business while maximizing returns to shareholders. Net Debt/EBITDA is a key debt coverage ratio that motivates management to minimize debt relative to cash flow. |
Return on Invested Capital (ROIC) |
|
Earnings before interest and taxes (“EBIT”) excluding amortization of customer relationships, impairment expense, loss on asset sale, loss on early extinguishment of debt, and the tax effects of such amounts, divided by average total liabilities and stockholder’s equity, excluding current liabilities, intangible assets and impairment of property and equipment in order to derive an operating asset driven ROIC calculation, as presented in the full year earnings press release furnished as exhibit 99.1 to the Form 8-K filed with the SEC on February 16, 2022. |
|
ROIC is used as a performance metric that measures the efficiency of our capital investments and quality of our earnings. ROIC is a metric that many investors consider when assessing the performance of companies in our sector. |
ESG |
|
The Compensation Committee of our Board, with input as appropriate from the ESG Committee, will consider the company’s ESG plan in this assessment, which will include non-financial performance goals to: continue progress towards meeting our 2025 climate goals, demonstrate leading safety performance compared to industry peers, reduce the number of reportable spills, provide a safe environment for our employees and contractors as we navigate the challenges of the Covid-19 pandemic, enhance reporting on company community engagement and relations efforts, conduct a climate risk analysis as required by the Taskforce on Climate-related Financial Disclosures, create an inter-departmental ESG Advisory Council to manage ESG challenges and opportunities throughout the organization, require employee training requirements with respect to the following company policies: Human Labor and Indigenous Rights, Diversity and Inclusion, and Supplier Code of Conduct. |
|
These functions are critical to the success of the business and the execution of our overall strategy. Our people are motivated to work in a safe environment that shows progress toward sustainable environmental goals.
When determining the performance score for the ESG metric the Compensation Committee considered an evaluation by the ESG Committee assessing progress on ESG goals in 2021. The ESG Committee concluded that we exceeded expectations with regard to these goals. As a result, the Compensation Committee awarded a performance score slightly above the target level. |
2021 Annual Incentive Program Payouts
The 2021 annual cash bonus amounts reported below
reflect the portion of the annual cash bonus for each Named Executive Officer allocated to the Company. For additional information,
see “Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation Committee and Allocation
of Compensation Expenses” above. The amounts below are reported in the “Non-Equity Incentive Plan Compensation”
column of the Summary Compensation Table.
|
- 2022 Proxy Statement 43 |
Executive Officer |
|
Percentage of
2021 Target Bonus
Paid for 2021
Performance |
|
Allocated 2021 Annual Cash Bonus Payments |
|
Paul M. Rady |
|
173.7% |
|
$ |
598,431 |
|
Brendan E. Krueger |
|
173.7% |
|
$ |
124,925 |
|
Alvyn A. Schopp |
|
173.7% |
|
$ |
214,085 |
|
Michael N. Kennedy |
|
173.7% |
|
$ |
256,902 |
|
W. Patrick Ash |
|
173.7% |
|
$ |
177,691 |
|
Glen C. Warren, Jr.(1) |
|
n/a |
|
|
n/a |
|
(1) |
No annual cash bonus was paid to Mr. Warren for 2021 as a result of his retirement on April 30,
2021. |
Long-Term Incentive Awards
2021 Long-Term Incentive Awards
In 2021, consistent with awards in 2020, the
Compensation Committee elected to grant solely restricted stock units to our Named Executive Officers pursuant to the AM LTIP.
The Compensation Committee also felt that granting solely restricted stock units communicated the importance of retention to our
key employees and is in line with market compensation for midstream companies. The restricted stock units granted to our Named
Executive Officers in 2021 vest ratably on the first four anniversaries of the date of grant, subject to continued service.
Target Value of Long-Term Incentive Awards
In 2021, the Compensation Committee, in discussion
with the AR Compensation Committee, determined that it was appropriate for the aggregate target value of the equity awards granted
to our Named Executive Officers to target the 50th percentile of long-term incentive awards granted to executive officers
of the members of our Peer Group. As discussed above under “Implementing Our Compensation Program Objectives—Role of
the Antero Resources Compensation Committee and Allocation of Compensation Expenses,” the portion of this target value that
was allocated to the Company determined the size of the long-term incentive awards granted to our Named Executive Officers in 2021,
as set forth in the table below:
Executive Officer | |
2021 Allocated Target Long-Term Incentive Value(1) |
Paul M. Rady | |
$ | 4,500,000 | |
Brendan E. Krueger | |
$ | 500,000 | |
Alvyn A. Schopp | |
$ | 1,400,000 | |
Michael N. Kennedy | |
$ | 1,000,000 | |
W. Patrick Ash | |
$ | 1,000,000 | |
Glen C. Warren, Jr.(2) | |
$ | n/a | |
(1) |
The amounts set forth in this column differ from the amounts set forth under the “Summary Compensation Table”
and the “Grants of Plan-Based Awards for Fiscal Year 2021” below, as these amounts were set by the Compensation
Committee and then divided by the closing price on the applicable date of grant to determine the number of restricted stock
units and target performance share units to be granted. The amounts set forth under “Summary Compensation Table”
and the “Grants of Plan-Based Awards for Fiscal Year 2021” below reflect the grant date fair value of the number
of restricted stock units and target performance share units granted, as computed in accordance with FASB ASC Topic 718, resulting
in a lower value attributable to the grants under those tables. |
(2) |
Mr. Warren did not receive a grant of performance share units or restricted stock units from the Company in 2021. |
The number of restricted stock units granted
to our Named Executive Officers in 2020 are described more fully under “Grants of Plan-Based Awards for Fiscal Year 2021”
below.
|
- 2022 Proxy Statement 44 |
Other Benefits
Health and Welfare Benefits
Our Named Executive Officers are eligible to
participate in all of Antero Resources’ employee health and welfare benefit arrangements on the same basis as other employees
of Antero Resources (subject to applicable law). These arrangements include medical, dental, vision and disability insurance, as
well as health savings accounts.
These benefits are provided to ensure that we
and Antero Resources can competitively attract and retain officers and other employees. This is a fixed component of compensation,
and these benefits are provided on a non-discriminatory basis to all Antero Resources employees.
Retirement Benefits
Antero Resources maintains an employee retirement
savings plan through which employees may save for retirement or future events on a tax-advantaged basis. Participation in the 401(k)
plan is at the discretion of each individual Antero Resources employee, and our Named Executive Officers participate in the plan
on the same basis as all other employees. The plan permits Antero Resources to make discretionary matching and non-elective contributions.
During 2021, Antero Resources matched 100% of
the first 4% of eligible compensation that employees contributed to the plan. We increased this amount to 6% effective January
1, 2022. These matching contributions are immediately fully vested. As part of our general and administrative expense, we reimbursed
Antero Resources for a portion of these matching contributions.
Perquisites and Other Personal Benefits
We believe the total mix of compensation and
benefits provided to our Named Executive Officers is currently competitive. Therefore, perquisites do not play a significant role
in our Named Executive Officers’ total compensation.
2022 Compensation Decisions
After considering data provided by NFPCC regarding
compensation paid to similarly-situated executives at the members of the 2022 peer group, the Compensation Committee and the AR
Compensation Committee increased the target pay for our Named Executive Officers for 2022 largely as a result of the following
factors:
• |
the company’s stock price performance; |
• |
management of two separate publicly traded companies; |
• |
increasingly competitive talent market; and |
• |
improving market conditions. |
As always, compensation paid by other members
of our peer group is only one of many factors considered by the Compensation Committee and the AR Compensation Committee when setting
compensation levels for our Named Executive Officers.
|
- 2022 Proxy Statement 45 |
Base Salaries
In March 2022, after comparing base salary levels
to those of similarly situated executives in the 2022 peer group, reviewing the Company’s performance during 2021, and discussing
the recommendations of Messrs. Rady and Kennedy and NFPCC, the Compensation Committee approved the following increases to base
salary for the Named Executive Officers who continue to serve as executive officers during 2022:
Executive Officer | |
2021 Allocated Base Salary | |
2022 Allocated Base Salary(1) | |
Percentage Increase |
Paul M. Rady | |
$ | 287,100 | | |
$ | 377,000 | | |
| 31 | % |
Brendan E. Krueger | |
$ | 89,900 | | |
$ | 133,400 | | |
| 48 | % |
Michael N. Kennedy | |
$ | 147,900 | | |
$ | 191,400 | | |
| 29 | % |
W. Patrick Ash | |
$ | 120,350 | | |
$ | 162,800 | | |
| 40 | % |
(1) |
Allocated base salary included here calculated based on the 2021 NEO AM Reimbursement Percentage.
The actual percentage of base salary allocated to the Company for 2022 will not be determinable until the 2022 Reimbursement
Percentage is calculated following the end of 2022. |
Annual Cash Incentive Awards
In April 2022, the Compensation Committee approved
an annual incentive plan for the 2022 fiscal year. The 2022 annual incentive plan mirrors the 2021 annual incentive plan. We believe
this structure motivates our Named Executive Officers to accomplish specific objectives that are important to our success and sustainable
growth.
Long-Term Incentive Awards
The Compensation Committee granted 75% time-based
equity awards and 25% performance-based equity awards to our Named Executive Officers in April 2022. These awards are subject to
the terms and provisions of the 2020 AM LTIP and the award agreements pursuant to which they were granted. In contrast to prior
years, in 2022, the Compensation Committee established the value of the long-term incentive awards that we granted to our Named
Executive Officers without regard to the long-term incentive award value granted by Antero Resources to our Named Executive Officers.
This change in approach, in combination with the increase in overall target compensation for our Named Executive Officers for 2022
discussed above under “2022 Compensation Decisions,” resulted in an increase in value of these awards for 2022 as compared
to 2021.
Other Matters
Employment, Severance or Change-in-Control Agreements
We do not maintain any employment, severance
or change-in-control agreements with any of our Named Executive Officers.
As discussed below under “Potential Payments
Upon a Termination or a Change in Control,” each of Messrs. Rady, Schopp, Kennedy and Ash would be entitled to receive accelerated
vesting of his performance share units and restricted stock units that remain unvested upon his termination of employment with
us under certain circumstances or upon the occurrence of certain corporate events. A description of the treatment of Mr. Warren’s
outstanding awards in connection with his retirement on April 30, 2021 are also discussed in the same section.
|
- 2022 Proxy Statement 46 |
Stock Ownership Guidelines
Following the closing of the Simplification Transactions,
we adopted stock ownership guidelines, pursuant to which our executive officers are required to own a minimum number of shares
of our common stock within five years of becoming an executive officer or five years after adoption of the policy, whichever is
later. In particular, each of our executive officers is required to own shares of our common stock having an aggregate fair market
value equal to at least a designated multiple of the executive officer’s base salary. The guidelines for executive officers
are set forth in the table below.
Officer Level |
Ownership Guideline |
Chief Executive Officer, President, and Chief Financial Officer |
5x annual base salary |
Vice President |
3x annual base salary |
Other Officers (if applicable) |
1x annual base salary |
Compliance with these guidelines is measured
as of June 30 of each year. If an individual covered by the ownership guidelines satisfies the guidelines on a prior determination
date, a subsequent decrease in our stock price will not cause that executive to be out of compliance on a later determination date.
As of June 30, 2021, less than five years had passed since adoption of the policy and, as a result, each of our Named Executive
Officers had time remaining to achieve the requisite ownership levels.
Tax and Accounting Treatment of Executive Compensation Decisions
Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”), generally imposes a $1 million limit on the amount of compensation paid to “covered
employees” (as defined in Section 162(m)) that a public corporation may deduct for federal income tax purposes in any year.
The “Tax Cuts and Jobs Act,” enacted in 2017, repealed the performance-based compensation exception to the Section
162(m) deduction limitation for tax years beginning after December 31, 2017. In addition, the Tax Cuts and Jobs Act generally expanded
the scope of who is considered a “covered employee.” With these changes, compensation paid to certain of our executives
will be subject to the $1 million per year deduction limitation imposed by Section 162(m). While we will continue to monitor our
compensation programs in light of the deduction limitation imposed by Section 162(m), our Compensation Committee considers it important
to retain the flexibility to design compensation programs that are in the best long-term interests of the Company and our stockholders.
As a result, we have not adopted a policy requiring that all compensation be fully deductible. The Compensation Committee may conclude
that paying compensation at levels in excess of the limits under Section 162(m) is in the best interests of the Company and our
stockholders. It is likely that the Company will not be able to deduct for federal income tax purposes a portion of the compensation
paid to our Named Executive Officers in 2020.
Many other Code provisions and accounting rules
affect the payment of executive compensation and are generally taken into consideration as our compensation arrangements are developed.
Our goal is to create and maintain compensation arrangements that are efficient, effective and in full compliance with these requirements.
Risk Assessment
We have reviewed our compensation policies and
practices to determine whether they create risks that are reasonably likely to have a material adverse effect on our Company. In
connection with this risk assessment, we reviewed the design of our compensation and benefits program and related policies and
determined that certain features of our programs and corporate governance generally help mitigate risk. Among the factors considered
were the mix of cash and equity compensation, the balance between short- and long-term objectives of our incentive compensation,
the degree to which programs provide for discretion to determine payout amounts, and our general governance structure.
|
- 2022 Proxy Statement 47 |
Our Compensation Committee believes that evaluating
overall business performance and implementing Company objectives assists in mitigating excessive risk-taking that could harm our
value or reward poor judgment by our executives. Several features of our programs reflect sound risk-management practices.
• |
The Compensation Committee believes our overall compensation program provides a reasonable
balance between short- and long-term objectives, which helps mitigate the risk of excessive risk-taking in the short term. |
• |
The metrics that determine ultimate value awarded under our incentive compensation programs
are associated with total Company value. We do not believe these metrics create pressure to meet specific financial or individual
performance goals. |
• |
The multi-year vesting of our equity awards discourages excessive risk-taking and undue focus
on short-term gains that may not be sustainable. |
Due to the foregoing program features, the Compensation
Committee concluded that our compensation policies and practices for all employees, including our Named Executive Officers, are
not reasonably likely to have a material adverse effect on the Company.
Tally Sheets
The Compensation Committee and the AR Compensation
Committee use tally sheets as a reference in reviewing and establishing our Named Executive Officers’ compensation. The tally
sheets provide a holistic view of all material elements of our Named Executive Officers’ compensation, including base salary,
annual cash incentive awards, long-term equity incentive awards and indirect compensation such as perquisites and retirement benefits,
including the portions of such compensation that are paid for services provided to Antero Resources. Tally sheets also demonstrate
the amounts each executive could potentially receive under various termination and change in control scenarios, and include a summary
of all shares beneficially owned.
Hedging and Pledging Prohibitions
Our Insider Trading Policy prohibits our Named
Executive Officers from engaging in speculative transactions involving our common stock, including buying or selling puts or calls,
short sales, purchasing securities on margin, or otherwise hedging the risk of ownership of such securities. The Insider Trading
Policy also prohibits our Named Executive Officers from pledging shares of such securities as collateral.
Clawback Policy
We have adopted a general clawback policy covering
long-term incentive award plans and arrangements. The clawback policy applies to our current Named Executive Officers as well as
certain of our former Named Executive Officers. Generally, recoupment of compensation would be triggered under the policy in the
event of a financial restatement caused by fraud or intentional misconduct. In the event of such misconduct, we may recoup performance-based
equity compensation that was granted, earned or vested based wholly or in part upon the attainment of any financial reporting measure
during the period in which such misconduct took place. The clawback policy gives the policy administrator discretion to determine
whether a clawback of compensation should be initiated in any given case, as well as the discretion to make other determinations,
including whether a covered individual’s conduct meets a specified standard, the amount of compensation to be clawed back,
and the form of reimbursement.
In order to comply with applicable law, the clawback
policy may be updated or modified once the SEC adopts final clawback rules pursuant to the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010. In addition, the AM LTIP generally provides that, to the extent required by applicable law or any applicable
securities exchange listing standards, or as otherwise determined by the Compensation Committee, all awards under the AM LTIP are
subject to the provisions of any clawback policy the Company implements.
|
- 2022 Proxy Statement 48 |
Compensation Committee Report
The material in this report is not “soliciting
material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing under
the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation
language in such filing.
The Compensation Committee has reviewed and discussed
the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such
review and discussion, the Board of Directors has determined that the Compensation Discussion and Analysis should be included in
this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K.
|
Compensation Committee Members*:
David H. Keyte, Chairman
W. Howard Keenan, Jr.
Peter A. Dea |
* |
Includes all members of the Compensation Committee as of the time the Compensation Committee Report was approved for inclusion in this Proxy Statement. |
|
- 2022 Proxy Statement 49 |
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table summarizes, with respect
to our Named Executive Officers, information relating to the compensation earned for services rendered in all capacities during
the fiscal years ended December 31, 2021, 2020, and 2019. The table reflects only the portion of the compensation earned by our
Named Executive Officers attributable to their services to the Company, and does not include compensation earned for services provided
to Antero Resources or its subsidiaries. See above under “Compensation Discussion and Analysis—Implementing Our Compensation
Program Objectives—Role of the Antero Resources Compensation Committee and Allocation of Compensation Expenses” for
further discussion of the allocation methodology used.
Name and
Principal Position |
|
Year |
|
Salary
($) |
|
|
Bonus
($)(2) |
|
Stock
Awards
($)(3) |
|
Option
Awards
($)(4) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
All Other
Compensation
($)(5) |
|
Total
($) |
|
Paul M. Rady
(Chairman of the Board of Directors, Chief Executive Officer and President) |
|
2021 |
|
287,100 |
|
|
— |
|
4,499,995 |
|
— |
|
598,431 |
|
3,364 |
|
5,388,890 |
|
|
2020 |
|
233,805 |
|
|
322,651 |
|
2,131,200 |
|
— |
|
— |
|
3,883 |
|
2,691,539 |
|
|
2019 |
|
238,095 |
|
|
— |
|
2,690,973 |
|
15,200,000 |
|
272,335 |
|
4,662 |
|
18,406,065 |
(3) |
Brendan E. Krueger(6)
(Chief Financial Officer, Treasurer and Vice President) |
|
2021 |
|
89,900 |
|
|
— |
|
499,998 |
|
— |
|
124,925 |
|
3,364 |
|
718,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alvyn A. Schopp
(Chief Administrative Officer and Regional Sr. Vice President) |
|
2021 |
|
145,000 |
|
|
1,000,000 |
|
1,399,993 |
|
— |
|
214,085 |
|
3,364 |
|
2,762,442 |
|
|
2020 |
|
129,438 |
|
|
126,525 |
|
3,333,339 |
|
— |
|
— |
|
3,883 |
|
3,593,185 |
|
|
2019 |
|
130,423 |
|
|
— |
|
550,429 |
|
— |
|
117,806 |
|
4,662 |
|
803,320 |
|
Michael N. Kennedy(7)
(Director and Sr. Vice President—Finance) |
|
2021 |
|
147,900 |
|
|
177,778 |
|
999,995 |
|
— |
|
256,902 |
|
3,364 |
|
1,585,939 |
|
|
2020 |
|
109,000 |
|
|
106,547 |
|
2,133,338 |
|
— |
|
— |
|
3,883 |
|
2,352,768 |
|
|
2019 |
|
110,364 |
|
|
— |
|
795,057 |
|
1,266,350 |
|
99,205 |
|
4,662 |
|
2,275,638 |
(3) |
W. Patrick Ash
(Sr. Vice President—Reserves, Planning & Midstream) |
|
2021 |
|
120,350 |
|
|
111,111 |
|
999,995 |
|
— |
|
177,691 |
|
3,364 |
|
1,412,511 |
|
|
2020 |
|
99,463 |
|
|
97,225 |
|
1,666,670 |
|
— |
|
— |
|
3,883 |
|
1,867,241 |
|
|
2019 |
|
96,993 |
|
|
— |
|
199,996 |
|
— |
|
85,200 |
|
4,662 |
|
386,851 |
|
Glen C. Warren, Jr.(8)
(Former Director, President and Secretary) |
|
2021 |
|
90,625 |
(1) |
|
— |
|
— |
|
— |
|
— |
|
3,364 |
|
93,989 |
|
|
2020 |
|
175,763 |
|
|
215,112 |
|
852,480 |
|
— |
|
— |
|
3,883 |
|
1,247,238 |
|
|
2019 |
|
178,988 |
|
|
— |
|
1,100,860 |
|
10,133,650 |
|
170,663 |
|
4,662 |
|
11,588,823 |
(3) |
(1) |
The amount reported in this column for Mr. Warren includes the Company’s allocated portion of his base salary for 2021, as well as the value of his accrued but unused paid time off allocable to the Company, $23,423, which was paid to Mr. Warren upon his April 30, 2021 retirement. |
(2) |
The amounts reported in this column for 2021 for Messrs. Kennedy, Schopp and Ash reflect the portion of the special cash retention awards granted to such Named Executive Officers during 2020 that vested and were paid out in 2021. The annual incentive program implemented in 2021 is intended to incentivize our Named Executive Officers to achieve specific performance goals throughout the year, and, as a result, such amounts earned under the annual incentive program for 2021 are reported in the “Non-Equity Incentive Plan Compensation” column, rather than the “Bonus” column. |
(3) |
The amounts in this column represent the grant date fair value of restricted stock unit awards granted to the Named Executive Officers in 2021 pursuant to the AM LTIP, each as computed in accordance with FASB ASC Topic 718. See Note 12 to our consolidated financial statements on Form 10-K for the year ended December 31, 2021, for additional detail regarding assumptions underlying the value of these equity awards. |
(4) |
The unvested Series B Units in Antero IDR Holdings LLC (“IDR LLC”), originally granted in December 2016 and January 2017 prior to the initial public offering of Antero Midstream GP LP, our predecessor entity, were exchanged for restricted shares on March 12, 2019 in connection with the Simplification Transactions, which were approved by an overwhelming majority of the common shares held by disinterested stockholders of Antero Midstream GP LP and an overwhelming majority of the common units held by disinterested unitholders of Antero Midstream GP LP. The exchange of the unvested Series B Units (the “Series B Exchange”) resulted in an accounting modification under FASB ASC Topic 718, and the amounts in the “Option Awards” column for 2019, which are also included in the “Total” column for 2019, represent the incremental fair value of the modification as computed in accordance with FASB ASC Topic 718. Excluding the incremental fair value of the modification for accounting purposes, the total compensation of the Named Executive Officers for 2019 would instead be $3,206,065 for Mr. Rady, $1,009,288 for Mr. Kennedy and $1,455,173 for Mr. Warren. Absent the Simplification Transactions and the Series B Exchange, no value relating to the Series B Units in IDR LLC would be included in this column for 2019. See Note 13 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for additional detail regarding assumptions underlying the value of unvested Series B Units in IDR LLC. |
|
- 2022 Proxy Statement 50 |
(5) |
The amounts in this column represent the amount of the Company’s allocated portion of Antero Resource’s 401(k) match for fiscal 2021 for each participating Named Executive Officer. |
(6) |
Effective upon Mr. Warren’s retirement on April 30, 2021, Mr. Kreuger was appointed Chief Financial Officer, Treasurer and Vice President of the Company. |
(7) |
Effective upon Mr. Warren’s retirement on April 30, 2021, Mr. Kennedy was appointed as a Director and ceased to serve as the Company’s Chief Financial Officer. |
(8) |
Mr. Warren retired as President and Secretary of the Company and as a member of the Board effective as of April 30, 2021. |
Grants of Plan-Based Awards for Fiscal Year 2021
The table below sets forth the awards granted
to our Named Executive Officers during 2021, including awards under the 2021 annual cash incentive plan and restricted stock unit
awards granted under the AM LTIP.
Name |
|
Grant
Date |
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1) |
|
All Other Stock
Awards:
Number of Shares of
Stock
or Units
(#)(2) |
|
Grant Date
Fair Value
of Stock
and Option
Awards
($)(3) |
|
Threshold
($) |
|
Target
($) |
|
Maximum
($) |
|
Paul M. Rady |
|
|
|
172,260 |
|
344,520 |
|
689,040 |
|
|
|
|
|
RSUs(4) |
|
4/15/21 |
|
|
|
|
|
|
|
516,647 |
|
4,499,995 |
|
Brendan E. Krueger |
|
|
|
35,960 |
|
71,920 |
|
143,840 |
|
|
|
|
|
RSUs(4) |
|
4/15/21 |
|
|
|
|
|
|
|
57,405 |
|
499,998 |
|
Alvyn A. Schopp |
|
|
|
61,625 |
|
123,250 |
|
246,500 |
|
|
|
|
|
RSUs(4) |
|
4/15/21 |
|
|
|
|
|
|
|
160,734 |
|
1,399,993 |
|
Michael N. Kennedy |
|
|
|
73,950 |
|
147,900 |
|
295,800 |
|
|
|
|
|
RSUs(4) |
|
4/15/21 |
|
|
|
|
|
|
|
114,810 |
|
999,995 |
|
W. Patrick Ash |
|
|
|
51,149 |
|
102,298 |
|
204,595 |
|
|
|
|
|
RSUs(4) |
|
4/15/21 |
|
|
|
|
|
|
|
114,810 |
|
999,995 |
|
Glen C. Warren, Jr. |
|
|
|
101,500 |
|
203,000 |
|
406,000 |
|
— |
|
— |
|
(1) |
These columns reflect the threshold, target and maximum amount that may be earned under our 2021 annual cash incentive plan. Mr. Kennedy’s target annual cash incentive payment was revised to 100% of base salary in June 2021 in connection with his promotion to Chief Financial Officer and was not prorated for the 2021 calendar year. |
(2) |
This column reflects the number of restricted stock unit awards granted to each Named Executive Officer (other than Mr. Warren) in 2021. |
(3) |
The amounts in this column represent the grant date fair value of restricted stock unit awards granted to the Named Executive Officers (other than Mr. Warren) pursuant to the AM LTIP, as computed in accordance with FASB ASC Topic 718. See Note 12 to our consolidated financial statements on Form 10-K for the year ended December 31, 2021, for additional detail regarding assumptions underlying the value of these equity awards. |
(4) |
The restricted stock units granted to the Named Executive Officers (other than Mr. Warren) are subject to ratable vesting on the first four anniversaries of April 15, 2021, in each case, subject to such Named Executive Officer’s continued employment through such date. |
|
- 2022 Proxy Statement 51 |
Narrative Disclosure to Summary Compensation Table and Grants
of Plan-Based Awards Table
The following is a discussion of material
factors necessary to an understanding of the information disclosed in the Summary Compensation Table and the Grants of Plan-Based
Awards for Fiscal Year 2021 table.
Restricted Stock Units
The Compensation Committee granted restricted
stock unit awards to each of our Named Executive Officers (other than Mr. Warren) in 2021. The restricted stock units vest over
a four-year period, if such employees remain continuously employed by us from the grant date through the applicable vesting date.
The potential acceleration and forfeiture events related to these restricted stock units are described in greater detail under
the heading “Potential Payments Upon Termination or Change in Control” below.
Outstanding Equity Awards at 2021 Fiscal Year-End
The following table provides information
concerning equity awards granted by the Company to our Named Executive Officers that had not vested as of December 31, 2021.
|
|
Stock Awards |
|
Name |
|
Number of Units That Have Not Vested
(#) |
|
Market Value of Units That Have Not Vested
($)(1) |
|
Paul M. Rady |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
988,357 |
|
|
9,567,296 |
|
|
Brendan E. Krueger |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
104,186 |
|
|
1,008,520 |
|
|
Alvyn A. Schopp |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
315,561 |
|
|
3,054,630 |
|
|
Michael N. Kennedy |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
368,630 |
|
|
3,568,338 |
|
|
W. Patrick Ash |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
278,322 |
|
|
2,694,157 |
|
|
Glen C. Warren, Jr. |
|
|
|
|
|
|
|
Restricted Stock Units(2) |
|
— |
|
|
— |
|
|
(1) |
The amounts reflected in this column represent the market value of our common stock underlying the unvested restricted stock unit awards (and Messrs. Rady, Schopp and Kennedy, performance share units for which performance has been achieved but which remain subject to time-based vesting conditions, as described in Note 2 below) held by the Named Executive Officers, computed based on the closing price of our common stock on December 31, 2021, which was $9.68 per share. |
(2) |
Except as otherwise provided in the applicable award agreement, with respect to the amounts reported in these rows (i) the restricted stock unit awards reflecting converted phantom units that were granted to Mr. Ash in 2018 vested on January 15, 2022, (ii) the restricted stock units awards granted in 2019 vested or will vest ratably on April 15 of each of 2022 and 2023, (iii) the restricted stock unit awards granted to Messrs. Rady and Warren in 2020 vested or will vest ratably on April 15 of each of 2022, 2023 and 2024, (iv) 25% of the unvested restricted stock unit award granted to Mr. Schopp in 2020 vested on January 20, 2022, (v) the restricted stock unit awards granted to Messrs. Kennedy and Ash in 2020 vested or will vest ratably on January 20 of each of 2022 and 2023, and (vi) the restricted stock unit awards granted to each of the Named Executive Officers (other than Mr. Warren) in 2021 vested or will vest ratably on April 15 of each of 2022, 2023, 2024 and 2025, in each case, so long as the applicable Named Executive Officer remains continuously employed by us from the grant date through the applicable vesting date. The performance goals applicable to the performance share units granted to Messrs. Rady, Schopp and Kennedy in 2019 were achieved at the maximum level on December 31, 2021, but the Named Executive Officers must remain employed through April 15, 2022 for such awards to vest and be settled, so such awards have also been included as restricted stock units for purposes of this table. |
|
- 2022 Proxy Statement 52 |
Option Exercises and Stock Vested in Fiscal Year 2021
The following table provides information
concerning equity awards that vested or were exercised by our Named Executive Officers during the 2021 fiscal year.
|
|
Option Awards |
|
Stock Awards |
Name |
|
Number of Shares Acquired on Exercise (#) |
|
Value Realized on Exercise ($) |
|
Number of Shares Acquired on Vesting (#)(1) |
|
Value Realized on Vesting ($)(2) |
Paul M. Rady |
|
— |
|
|
— |
|
|
144,748 |
|
|
1,179,696 |
|
Brendan E. Krueger |
|
— |
|
|
— |
|
|
19,797 |
|
|
161,346 |
|
Alvyn A. Schopp |
|
— |
|
|
— |
|
|
357,375 |
|
|
2,861,961 |
|
Michael N. Kennedy |
|
— |
|
|
— |
|
|
112,056 |
|
|
829,769 |
|
W. Patrick Ash |
|
— |
|
|
— |
|
|
83,246 |
|
|
611,741 |
|
Glen C. Warren, Jr. |
|
— |
|
|
— |
|
|
109,203 |
|
|
945,513 |
|
(1) |
This column reflects the (i) number of restricted stock units held by each Named Executive Officer that vested during the 2021 fiscal year and (ii) for Mr. Warren, the number of performance share units that vested on December 31, 2021, at the end of the applicable performance period, based on actual performance over that period, which was maximum. Although performance was achieved for the 2019 performance share units as of December 31, 2021, continued employment is required for all of the Named Executive Officers other than Mr. Warren through April 15, 2022 in order for such awards to vest. As a result, such awards did not vest until April 15, 2022 and no performance share unit awards held by any Named Executive Officer other than Mr. Warren vested during the 2021 fiscal year. |
(2) |
The amounts reflected in this column represent the aggregate market value realized by each Named Executive Officer upon vesting of the restricted stock unit awards held by such Named Executive Officer, computed based on the adjusted closing price of our common stock on the applicable vesting date. |
Pension Benefits
We do not provide pension benefits to our
employees.
Nonqualified Deferred Compensation
We do not provide nonqualified deferred compensation
benefits to our employees.
|
- 2022 Proxy Statement 53 |
Potential Payments Upon Termination or Change in Control
Restricted Stock Units and Performance Share Units
Any unvested restricted stock units and cash
retention awards subject to time-based vesting criteria granted to our Named Executive Officers under the AM LTIP will become immediately
fully vested if the applicable Named Executive Officer’s employment with us terminates due to his death or “disability”
or in the event of a “change in control” (as such terms are defined in the AM LTIP). For performance share unit awards
granted in 2019, any continued employment conditions will be deemed satisfied on the earlier of (i) December 31, 2021 and (ii)
the date of the applicable Named Executive Officer’s termination due to his death or “disability” or upon the
occurrence of a “change in control,” the performance period will end as of such date and such performance share unit
awards will be settled based on the actual level of performance achieved as of such date.
In addition, any continued employment conditions
will be deemed satisfied for a prorated portion of any performance share units granted in 2019 on the date of a Named Executive
Officer’s termination of employment for any reason other than for “cause” that occurs after April 15, 2020, and
prior to April 15, 2022, based on the number of completed 12-month periods from the date of grant through the date of termination.
Such prorated portion will remain outstanding and eligible to vest at the end of the applicable performance period based on the
actual level of performance achieved as of such date.
For purposes of these awards, a Named Executive
Officer will be considered to have incurred a “disability” if the executive is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death
or that has lasted or can be expected to last for a continuous period of at least 12 months.
For purposes of these awards, a “change
in control” generally means the occurrence of any of the following events:
• |
A person or group of persons acquires beneficial ownership of 50% or more of either (a) the outstanding shares of our common stock or (b) the combined voting power of our voting securities entitled to vote in the election of directors, in each case with the exception of (i) any acquisition directly from us, (ii) any acquisition by us or any of our subsidiaries, or (iii) any acquisition by any employee benefit plan sponsored or maintained by us or any entity controlled by us; |
• |
The incumbent members of the Board cease for any reason (other than death or disability) to constitute at least a majority of the Board; provided, however, that any individual becoming a director who is approved by a vote of at least two-thirds of the incumbent members of the Board shall be considered an incumbent member of the Board for these purposes; |
• |
The consummation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of our assets, or an acquisition of assets of another entity (a “Business Combination”), in each case, unless, following such Business Combination, (A) our outstanding common stock immediately prior to such Business Combination represents more than 50% of the outstanding common equity interests and the outstanding voting securities entitled to vote in the election of directors of the surviving entity, (B) no person or group of persons beneficially owns 20% or more of the common equity interests of the surviving entity or the combined voting power of the voting securities entitled to vote generally in the election of directors of such surviving entity, and (C) at least a majority of the members of the board of directors of the surviving entity were members of the incumbent Board at the time of the execution of the initial agreement or corporate action providing for such Business Combination; or |
• |
Approval by our stockholders of a complete liquidation or dissolution of the Company. |
For purposes of the 2019 performance share
unit awards, “cause” shall mean a finding by the Compensation Committee of the executive’s: (i) final conviction
of, or plea of nolo contendere to, a crime that constitutes a felony (or state law equivalent); (ii) gross negligence or willful
misconduct in the performance of the executive’s duties that would reasonably be expected to have a material adverse economic
effect on us or any of our affiliates; (iii) willful failure without proper legal reason to perform the executive’s duties;
or (iv) a material breach of any material provision of the applicable award agreement or any other written agreement or corporate
policy or code of conduct established by us or any of our affiliates that would reasonably be expected to have a material adverse
economic effect on us or any of our affiliates.
|
- 2022 Proxy Statement 54 |
Quantification of Benefits
The following table summarizes the compensation
and other benefits that would have become payable to each Named Executive Officer assuming such Named Executive Officer was terminated
either (i) as a result of his death or disability or (ii) for any reason other than cause or a change in control of the Company,
in each case, on December 31, 2021. The restricted stock units and performance share units represent a direct interest in shares
of our common stock, which had a closing price on December 31, 2021, of $9.68 per share.
Name |
|
Cash Retention
Awards
($) |
|
Restricted
Stock Units
($) |
|
Performance
Share Units
($) |
|
Total ($) |
Paul M. Rady |
|
|
|
|
|
|
|
|
|
|
Death; Disability |
|
N/A |
|
8,063,334 |
|
1,503,962 |
(1) |
|
9,567,296 |
|
Termination Other Than For Cause |
|
N/A |
|
N/A |
|
1,002,641 |
(2) |
|
1,002,641 |
|
Change in Control |
|
N/A |
|
8,063,334 |
|
1,503,962 |
(3) |
|
9,567,296 |
|
Brendan E. Krueger |
|
|
|
|
|
|
|
|
|
|
Death; Disability |
|
N/A |
|
1,008,520 |
|
N/A |
|
|
1,008,520 |
|
Termination Other Than For Cause |
|
N/A |
|
N/A |
|
N/A |
|
|
N/A |
|
Change in Control |
|
N/A |
|
1,008,520 |
|
N/A |
|
|
1,008,520 |
|
Alvyn A. Schopp |
|
|
|
|
|
|
|
|
|
|
Death; Disability |
|
333,333 |
|
2,747,000 |
|
307,630 |
(1) |
|
3,387,963 |
|
Termination Other Than For Cause |
|
N/A |
|
N/A |
|
205,087 |
(2) |
|
205,087 |
|
Change in Control |
|
333,333 |
|
2,747,000 |
|
307,630 |
(3) |
|
3,387,963 |
|
Michael N. Kennedy |
|
|
|
|
|
|
|
|
|
|
Death; Disability |
|
355,555 |
|
3,123,988 |
|
444,351 |
(1) |
|
3,923,894 |
|
Termination Other Than For Cause |
|
N/A |
|
N/A |
|
296,234 |
(2) |
|
296,234 |
|
Change in Control |
|
355,555 |
|
3,123,988 |
|
444,351 |
(3) |
|
3,923,894 |
|
W. Patrick Ash |
|
|
|
|
|
|
|
|
|
|
Death; Disability |
|
222,222 |
|
2,694,157 |
|
N/A |
|
|
2,916,379 |
|
Termination Other Than For Cause |
|
N/A |
|
N/A |
|
N/A |
|
|
N/A |
|
Change in Control |
|
222,222 |
|
2,694,157 |
|
N/A |
|
|
2,916,379 |
|
(1) |
Acceleration of the performance share unit awards granted in 2019 is based upon actual performance as of the date of the termination of employment as a result of the Named Executive Officer’s death or disability. As of December 31, 2021, actual performance was at maximum, so the value reflected in this column represents settlement at each award’s maximum value. |
(2) |
Upon a Named Executive Officer’s termination other than for cause on December 31, 2021, two-thirds of the performance share units granted on April 15, 2019 would vest based on actual performance achieved as of December 31, 2021, the last day of the applicable performance period. As of December 31, 2021, actual performance was at maximum, so the value reflected in this column represents two-thirds of each award’s maximum value. |
(3) |
Acceleration of the performance share unit awards granted in 2019 is based upon actual performance as of the date of the change in control. As of December 31, 2021, actual performance was at maximum, so the value reflected in this column represents settlement at each award’s maximum value. |
|
- 2022 Proxy Statement 55 |
Warren Retirement
On April 30, 2021 (the “Warren Retirement
Date”), Mr. Warren retired from his position as President and Secretary of the Company. Mr. Warren did not enter into a separation
agreement with the Company and did not receive any additional payments or benefits in connection with his retirement, other than
the accelerated vesting of a portion of his outstanding equity awards in accordance with the terms of the AM LTIP and the applicable
award agreements thereunder. Pursuant to the terms of the AM LTIP and the applicable award agreements, none of Mr. Warren’s
restricted stock unit awards vested in connection with his retirement, but 21,186 of the performance share units granted to Mr.
Warren on April 15, 2019 remained outstanding following the Warren Retirement Date, subject to achievement of the applicable performance
goals through the remainder of the performance period ending December 31, 2021. The service component of these awards was deemed
to be met on Mr. Warren’s retirement. Such performance share units were subsequently earned as of December 31, 2021 based
on actual performance achieved, which was maximum, providing Mr. Warren with approximately a $410,171 benefit based on the closing
price of our common stock on December 31, 2021 of $9.68 per share. These awards will be settled at the same time as all other performance
share units granted on April 15, 2019. All other unvested equity awards held by Mr. Warren were forfeited for zero consideration
upon his retirement.
Equity Compensation Plan Information
The following table sets forth information
about securities that may be issued under the existing equity compensation plans of the Company as of December 31, 2021.
Plan
Category |
Number
of securities to
be issued upon exercise of
outstanding options, warrants
and rights (a)(1) |
|
Weighted
– average exercise
price of outstanding options,
warrants and rights (b) |
|
Number
of securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (a)) (c) |
|
Equity compensation plans approved by security holders |
|
|
|
|
|
|
|
|
|
Antero Midstream Corporation Long Term Incentive Plan(2) |
3,689,903 |
|
|
N/A |
(3) |
|
10,049,306 |
|
|
Equity compensation plans not approved by security holders |
— |
|
|
— |
|
|
— |
|
|
TOTAL |
3,689,903 |
|
|
— |
|
|
10,049,306 |
|
|
(1) |
This column reflects the maximum number of shares of our common stock subject to performance share unit awards and the number of shares of our common stock subject to restricted stock unit awards and options granted under the AM LTIP, outstanding and unvested as of December 31, 2021. Because the number of shares of common stock to be issued upon settlement of outstanding performance share unit awards is subject to performance conditions, the number of shares of common stock actually issued may be substantially less than the number reflected in this column. |
(2) |
The AM LTIP was approved by our stockholders in connection with the approval of the Simplification Transactions at the special meeting of Antero Midstream GP LP and Antero Midstream Partners LP in March 2019. |
(3) |
Only restricted stock units and performance share units have been granted under the AM LTIP; there is no weighted average exercise price associated with these awards. |
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- 2022 Proxy Statement 56 |
Chief Executive Officer Pay Ratio
Pursuant to Section 953(b) of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, this section provides information regarding the
relationship of the annual total compensation of all of our employees to the annual total compensation of our Chief Executive Officer,
Mr. Rady. For 2021, the median of the annual total compensation of all Company employees (other than our Chief Executive Officer),
calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, was $31,393, and the annual total compensation
of our Chief Executive Officer, as reported in the Summary Compensation Table, was $5,388,890.
Based on this information, for 2021, the
ratio of the annual total compensation of Mr. Rady to the median of the annual total compensation of all of our employees was 172
to 1.
Methodology and Assumptions
We selected December 31, 2021, as the date
on which to determine our employee population for purposes of identifying the median of the annual total compensation of all of
our employees (other than the Chief Executive Officer) because it was efficient to collect payroll data and other necessary information
as of that date. As of December 31, 2021, our employee population consisted of 513 individuals, including all individuals employed
by the Company or any of its consolidated subsidiaries, whether as full-time, part-time, seasonal or temporary workers. This population
does not include independent contractors. All of our employees are located in the United States.
In identifying our median employee in 2021,
we used the annual total compensation as reported in Box 1 of each employee’s Form W-2 for 2021 provided to the Internal
Revenue Service, minus the amount of each employee’s compensation that we did not reimburse Antero Resources for, calculated
using the same methodology used to determine the 2021 NEO AM Reimbursement Percentage, as described above under “Compensation
Discussion and Analysis—Implementing Our Compensation Program Objectives—Role of the Antero Resources Compensation
Committee and Allocation of Compensation Expenses.” We believe this methodology provides a reasonable basis for determining
the allocated portion of each employee’s total annual compensation, and is an economical method of evaluating the total annual
compensation of our employees and identifying our median employee. For the 59 employees hired during 2021, we utilized the annual
total compensation reported on each such employee’s Form W-2 for 2020 without annualization adjustments, less the amount
of such employee’s compensation that we did not reimburse Antero Resources for. No cost-of-living adjustments were made in
identifying our median employee, as all of our employees (including our Chief Executive Officer) are located in the United States.
This calculation methodology was consistently applied to our entire employee population, determined as of December 31, 2021, to
identify our median employee in 2021. After we identified our median employee, we calculated each element of our median employee’s
annual compensation for 2021 in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K using the allocation methodology
described above, which resulted in annual total compensation of $31,393. The difference between our median employee’s total
compensation reported on Form W-2 and our median employee’s annual total compensation calculated in accordance with paragraph
(c)(2)(x) of Item 402 of Regulation S-K was $3,584. This amount reflects the Company’s 401(k) match and non-cash imputed
earnings offset by benefits deductible from gross income. Similarly, the 2020 annual total compensation of our Chief Executive
Officer was calculated in accordance with paragraph (c)(2)(x) of Item 402 of Regulation S-K, as reported in the “Total”
column of the Summary Compensation Table.
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- 2022 Proxy Statement 57 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
Beneficial Ownership
The following table sets forth information
with respect to the beneficial ownership of our common stock as of April 28, 2022, by:
• |
each of our Named Executive Officers; |
• |
each of our directors and nominees; |
• |
all of our directors, director nominees and executive officers as a group; and |
• |
each person known to us to be the beneficial owner of more than 5% of our outstanding common stock. |
Except as otherwise noted, the persons or
entities listed below have sole voting and investment power with respect to all shares of our common stock beneficially owned by
them, except to the extent this power may be shared with a spouse. All information with respect to beneficial ownership has been
furnished by the respective directors, officers or more than 5% stockholders, as the case may be. Unless otherwise noted, the mailing
address of each person or entity named in the table is 1615 Wynkoop Street, Denver, Colorado, 80202.
|
Common Stock Beneficially Owned |
Name and Address of Beneficial Owner |
Number of Shares |
|
Percentage of Class |
Antero Resources(1) |
139,042,345 |
|
|
29.07% |
|
The Vanguard Group, Inc.(2) |
31,049,765 |
|
|
6.49% |
|
Invesco Ltd.(3) |
31,346,762 |
|
|
6.55% |
|
BlackRock, Inc.(4) |
30,173,928 |
|
|
6.31% |
|
Paul M. Rady(5) |
2,464,923 |
|
|
* |
|
Glen C. Warren, Jr.(6) |
10,848,730 |
|
|
2.27% |
|
Peter A. Dea |
56,438 |
|
|
* |
|
W. Howard Keenan, Jr.(7) |
114,555 |
|
|
* |
|
David H. Keyte |
49,587 |
|
|
* |
|
Brooks J. Klimley |
60,068 |
|
|
* |
|
Janine J. McArdle |
32,103 |
|
|
* |
|
John C. Mollenkopf |
63,430 |
|
|
* |
|
Rose M. Robeson |
61,571 |
|
|
* |
|
W. Patrick Ash(8) |
114,410 |
|
|
* |
|
Michael N. Kennedy(9) |
740,382 |
|
|
* |
|
Alvyn A. Schopp(10) |
1,663,271 |
|
|
* |
|
Brendan E. Krueger (11) |
73,903 |
|
|
* |
|
Directors and executive officers as a group (12 persons) |
3,846,721 |
|
|
* |
|
* |
Less than one percent. |
(1) |
Based upon its Schedule 13D/A filed on May 6, 2020. Includes 107,000,001 shares of common stock held by Antero Subsidiary Holdings LLC (“AR Sub”). Antero Resources owns 100% of the limited liability company interests in AR Sub. Because AR Sub is a party to the Stockholders’ Agreement with Messrs. Rady and Warren, AR Sub and Messrs. Rady and Warren may be deemed to have formed a Section 13(d) group. If such persons are deemed to have formed a Section 13(d) group, such group may be deemed to beneficially own an aggregate of 152,475,150 shares of common stock for purposes of Rule 13d-3 under the Exchange Act. The number of shares of common stock shown in the table above as beneficially owned by Antero Resources excludes shares of common stock owned by Messrs. Rady and Warren. Antero Resources and AR Sub disclaim beneficial ownership of these shares of common stock except to the extent of their pecuniary interest therein. |
(2) |
Based upon its Schedule 13G/A filed on February 9, 2022, with the SEC, The Vanguard Group, Inc. has a mailing address of 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. |
(3) |
Based solely upon a Schedule 13G/A filed by Invesco Ltd. on February 9, 2022. The principal address for Invesco Ltd. is 1555 Peachtree Street NE, Suite 1800, Atlanta, GA 30309. Invesco Ltd., a Bermuda corporation, is the parent company of Invesco Advisers, Inc., Invesco Investment Advisers, LLC and Invesco Capital Management LLC, each an investment adviser, and Invesco Ltd. may be deemed to beneficially own the shares held by these investment advisers. |
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- 2022 Proxy Statement 58 |
(4) |
Based solely upon a Schedule 13G/A filed by BlackRock, Inc. on February 3, 2022. BlackRock,
Inc.’s address is 55 East 52nd Street, New York, NY 10055. The registered holders of the referenced shares are funds
and accounts under management by investment adviser subsidiaries of BlackRock, Inc. (or wholly owned subsidiaries of such
funds and accounts). BlackRock, Inc. is the ultimate parent holding company of such investment adviser entities. On behalf
of such investment adviser entities, the applicable portfolio managers, as managing directors (or in other capacities) of
such entities, and/or the applicable investment committee members of such funds and accounts, have voting and investment power
over the shares held by the funds and accounts (or the wholly owned subsidiaries of such funds and accounts) which are the
registered holders of the referenced shares. Such portfolio managers and/or investment committee members expressly disclaim
beneficial ownership of all shares held by such funds and accounts (or such wholly owned subsidiaries). The address of such
funds and accounts (and such wholly owned subsidiaries), such investment adviser subsidiaries and such portfolio managers
and/or investment committee members is 55 East 52nd Street, New York, NY 10055. |
(5) |
Includes 1,180,821 shares of common stock held by Mockingbird Investment,
LLC (“Mockingbird”). Mr. Rady owns a 3.68% limited liability company interest in Mockingbird, and a trust under
his control owns the remaining 96.32%. Mr. Rady disclaims beneficial ownership of all securities held by Mockingbird except
to the extent of his pecuniary interest therein. Does not include 1,223,555 shares of common stock that remain subject to
vesting. Further, as a result of the Stockholders’ Agreement, AR Sub and Messrs. Rady and Warren may be deemed to have
formed a Section 13(d) group. If such persons are deemed to have formed a Section 13(d) group, such group may be deemed to
beneficially own an aggregate of 13,313,653 shares of common stock for the purpose of Rule 13d-3 under the Exchange Act. The
number of shares of common stock shown in the table above as beneficially owned by Mr. Rady excludes shares of common stock
owned by AR Sub and Mr. Warren. Mr. Rady disclaims beneficial ownership of these shares of common stock except to the extent
of his pecuniary interest therein. |
(6) |
Mr. Warren retired effective April 30, 2021. The amount reported Is based
on a Form 4 filed by Mr. Warren on April 22, 2021, the settlement of certain outstanding equity awards and the forfeiture
of certain shares to pay taxes on settled shares. |
(7) |
Has a mailing address of 410 Park Avenue, 19th Floor, New York, New York
10022. Mr. Keenan is a member and manager of the direct or indirect general partner of each of Yorktown Energy Partners VII,
L.P. and Yorktown Energy Partners VIII, L.P., which own 636,384 shares of common stock and 982,006 shares of common stock,
respectively. Mr. Keenan does not have sole or shared voting or investment power within the meaning of Rule 13d-3 under the
Exchange Act with respect to the shares of common stock held by such investment funds and disclaims beneficial ownership of
such securities except to the extent of his pecuniary interest therein. |
(8) |
Does not include 339,246 shares of common stock that remain subject to
vesting. |
(9) |
Does not include 406,156 shares of common stock that remain subject to
vesting. |
(10) |
Does not include 283,781 shares of common stock that remain subject to
vesting. |
(11) |
Does not include 203,527 shares of common stock that remain subject to
vesting. |
|
- 2022 Proxy Statement 59 |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Exchange Act and related
rules of the SEC require our directors and Section 16 officers, and persons who own more than 10% of a registered class of our
equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. These persons are required
by SEC regulations to furnish us with copies of all Section 16(a) reports that they file. We assist our directors and executive
officers in making their Section 16(a) filings, pursuant to powers of attorney granted by our insiders, based on information obtained
from them and our records.
DELINQUENT SECTION 16(A) REPORTS
Based solely upon a review of Forms 3 and
4 and amendments thereto furnished to Antero Midstream during 2021, including those reports we have filed on behalf of our directors
and Section 16 officers pursuant to powers of attorney, no person subject to Section 16 of the Exchange Act failed to file on a
timely basis during 2021.
RELATED PERSON TRANSACTIONS
General
The Audit Committee is charged with reviewing
the material facts of related person transactions that do not involve Antero Resources or its subsidiaries (other than the Company
and its subsidiaries). The Board, or, if so delegated by the Board, the Conflicts Committee, is charged with reviewing the material
facts of related person transactions involving Antero Resources and its subsidiaries (other than the Company and its subsidiaries).
The Audit Committee, the Board, or the Conflicts Committee, as applicable, either approves or disapproves of Antero Midstream’s
participation in such transactions under Antero Midstream’s Related Persons Transaction Policy adopted by the Board (“RPT
Policy”), which pre-approves certain transactions that are not deemed to be related person transactions pursuant to Item
404 of Regulation S-K.
The Audit Committee has the authority to
modify the RPT Policy regarding pre-approved transactions or to establish guidelines for Antero Midstream to participate in any
ongoing related person transaction.
For all related person transactions during
2021 that were required to be reported in “Related Persons Transactions,” the procedures described above were followed
unless the RPT Policy did not require review, approval or ratification of the transaction. References in this section to “Antero
Midstream,” “we,” “us,” “our” or like terms refer to Antero Midstream Corporation and
its consolidated subsidiaries.
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- 2022 Proxy Statement 60 |
Agreements with Antero Resources
Stockholders’ Agreement
On October 9, 2018, concurrently with the
execution of the Simplification Agreement, dated as of October 9, 2018 (the “Simplification Agreement”), by and among
Antero Resources, Antero Midstream (f/k/a Antero Midstream GP LP), Antero Midstream Partners LP (“Antero Midstream Partners”)
and certain of their affiliates (the “Simplification Agreement”), certain affiliates of Warburg Pincus LLC and Yorktown
Partners LLC (collectively, the “Sponsor Holders”); Antero Midstream GP LP; AR Sub, a wholly owned subsidiary of Antero
Resources; and Paul M. Rady, Glen C. Warren, Jr. and certain of their respective affiliates (collectively, the “Management
Stockholders”) entered into a Stockholders’ Agreement (the “Stockholders’ Agreement”), which became
effective as of the Closing and which governs certain rights and obligations of the parties following the consummation of the Simplification
Transactions. The Sponsor Holders and the Management Stockholders no longer have rights under the Stockholders’ Agreement
because they no longer hold the requisite number of shares of Antero Midstream Common Stock.
Under the Stockholders’ Agreement,
and subject to additional limitations in the event of a Fundamental Change (as defined in the Stockholders’ Agreement), AR
Sub is entitled to designate two directors, who initially were Mr. Rady and Mr. Warren, for nomination and election to the Board
for so long as, together with its affiliates, AR Sub owns an amount of shares equal to at least 8% of the qualifying Antero Midstream
Common Stock and one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common
Stock. On April 30, 2021, Mr. Warren retired from the Board and, in connection with his retirement, AR Sub designated Michael N.
Kennedy as its replacement director to serve on the Board to fill the resulting vacancy. Mr. Kennedy also stood for election at
the 2021 annual meeting as AR Sub’s director nominee.
The Sponsor Holders and the Management Stockholders
were previously entitled to certain director designation rights, but they no longer hold the requisite amount of Antero Midstream
Common Stock. Notwithstanding the foregoing, upon the occurrence of a Fundamental Change, AR Sub will be entitled to designate
one director so long as it owns an amount of shares equal to at least 5% of the qualifying Antero Midstream Common Stock.
Pursuant to the Stockholders’ Agreement,
AR Sub agreed to vote all of its shares of Antero Midstream Common Stock, at AR Sub’s election, either (i) in favor of any
other nominees nominated by the Nominating & Governance Committee of the Board or (ii) in proportion to the votes cast by the
public stockholders of Antero Midstream in favor of such nominees. In calculating the 8% and 5% ownership thresholds for purposes
of the Stockholders’ Agreement, qualifying Antero Midstream Common Stock is determined by dividing the Antero Midstream Common
Stock ownership for AR Sub as of the applicable measurement date by (i) the total number of outstanding shares of Antero Midstream
Common Stock at the Closing or (ii) the total number of outstanding shares on the applicable measurement date, whichever is less.
Pursuant to the terms of the Stockholders’ Agreement, no more than 45% of the shares of Antero Midstream Common Stock outstanding
as of closing of the Simplification Transactions will be subject to the obligations of the Stockholders’ Agreement.
In addition, under the Stockholders’
Agreement, for so long as AR Sub has the right to designate at least one director, if Mr. Rady is an executive officer of Antero
Resources, he shall serve as Chief Executive Officer at Antero Midstream and (ii) Mr. Rady shall be subject to removal from such
officer positions at Antero Midstream only for cause. For so long as Mr. Rady is a member of the Board and is an executive officer
of Antero Resources and/ or Antero Midstream, the parties have agreed that he shall serve as Chairman of the Board, subject to
his removal as Chief Executive Officer of Antero Midstream for cause. The Stockholders’ Agreement terminates as to each stockholder
upon the time at which such stockholder no longer has the right to designate an individual for nomination to the Board pursuant
to the Stockholders’ Agreement.
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- 2022 Proxy Statement 61 |
Registration Rights Agreement
Antero Midstream entered into a Registration
Rights Agreement (the “Registration Rights Agreement”), dated as of March 12, 2019, with Antero Resources, pursuant
to which Antero Midstream agreed to register the resale of certain shares of Antero Midstream Common Stock held by Antero Resources
and its subsidiaries, under certain circumstances.
Specifically, pursuant to the Registration
Rights Agreement, Antero Midstream took effective a registration statement under the Securities Act that permits the resale of
the Registrable Securities (as defined in the Registration Rights Agreement) from time to time as permitted by Rule 415 of the
Securities Act (or any similar provision adopted by the SEC then in effect) (the “Resale Registration Statement”).
Except in certain circumstances, Sponsor Holders (as defined in the Registration Rights Agreement), which includes Antero Resources
and its subsidiaries and Paul M. Rady, owning at least 3% of the issued and outstanding shares of Antero Midstream Common Stock
have the right to require Antero Midstream to facilitate an underwritten offering. Antero Midstream is not obligated to effect
any demand registration in which the anticipated aggregate offering price is less than $50.0 million. Sponsor Holders will also
have customary piggyback registration rights to participate in underwritten offerings.
Gathering and Compression Agreement
Pursuant to a gas gathering and compression
agreement with Antero Midstream, Antero Resources has agreed to dedicate all of its current and future acreage in West Virginia,
Ohio and Pennsylvania to Antero Midstream (other than the existing third-party commitments), so long as such production is not
otherwise subject to a pre-existing dedication to third-party gathering systems. Antero Resources’ production subject to
a pre-existing dedication will be dedicated to Antero Midstream at the expiration of such pre-existing dedication. In addition,
if Antero Resources acquires any gathering facilities, it is required to offer such gathering facilities to Antero Midstream at
its cost.
Under the gathering and compression agreement,
Antero Midstream was initially entitled to receive a low-pressure gathering fee of $0.30 per Mcf, a high-pressure gathering fee
of $0.18 per Mcf, a compression fee of $0.18 per Mcf, and a condensate gathering fee of $4.00 per Bbl, which, in each case, has
been subject to CPI-based adjustments. If and to the extent Antero Resources requests that Antero Midstream construct new high-pressure
lines and compressor stations, the gathering and compression agreement contains minimum volume commitments that require Antero
Resources to utilize or pay for 75% and 70%, respectively, of the capacity of such new construction. Additional high-pressure lines
and compressor stations installed on Antero Midstream’s own initiative are not subject to such volume commitments. These
minimum volume commitments on new infrastructure, as well as price adjustment mechanisms, are intended to support the stability
of Antero Midstream’s cash flows.
Antero Midstream also has an option to gather
and compress natural gas produced by Antero Resources on any acreage Antero Resources acquires in the future outside of West Virginia,
Ohio and Pennsylvania on the same terms and conditions. In the event that Antero Midstream does not exercise this option, Antero
Resources will be entitled to obtain gathering and compression services and dedicate production from limited areas to such third-party
agreements from third parties.
In return for Antero Resources’ acreage
dedication, Antero Midstream has agreed to gather, compress, dehydrate and redeliver all of Antero Resources’ dedicated natural
gas on a firm commitment, first-priority basis. Antero Midstream may perform all services under the gathering and compression agreement
or it may perform such services through third parties. In the event that Antero Midstream does not perform its obligations under
the gathering and compression agreement, Antero Resources will be entitled to certain rights and procedural remedies thereunder.
In addition to the foregoing, Antero Midstream has the right to elect to be paid for certain services under the gas and gathering
agreement on a cost of service basis designed to generate a specified rate of return.
Pursuant to the gathering and compression
agreement, Antero Midstream has also agreed to build to and connect all of Antero Resources’ wells producing dedicated natural
gas, subject to certain exceptions, upon 180 days’ notice by Antero Resources. In the event of late connections, Antero Resources
natural gas will temporarily not be subject
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- 2022 Proxy Statement 62 |
to the dedication. Antero Midstream is entitled
to compensation under the gathering and compression agreement for capital costs incurred if a well does not commence production
within 30 days following the target completion date for the well set forth in the notice from Antero Resources.
Antero Midstream has agreed to install compressor
stations at Antero Resources’ direction, but will not be responsible for inlet pressures or for pressuring natural gas to
enter downstream facilities if Antero Resources has not directed Antero Midstream to install sufficient compression. Additionally,
Antero Midstream will provide high-pressure gathering pursuant to the gathering and compression agreement.
Under the gathering and compression agreement,
Antero Resources may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication,
provided that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated
properties previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate
number of net acres of dedicated properties acquired by Antero Resources since such effective date. Accordingly, under certain
circumstances, Antero Resources may dispose of a significant number of net acres of dedicated properties free from dedication without
Antero Midstream’s consent.
After the completion of the initial term,
which, as described below, was extended to November 2038, the gathering and compression agreement will continue in effect from
year to year until such time as the agreement is terminated, effective upon an anniversary of the effective date of the agreement,
by either Antero Midstream or Antero Resources on or before the 180th day prior to the anniversary of such effective
date.
On February 23, 2018, the gathering and compression
agreement was amended to make clarifying changes with respect to the consumer price index (“CPI”) and other associated
fee adjustments.
On December 8, 2019, the gathering and
compression agreement was amended such that, Antero Midstream will rebate Antero Resources: (i) $12 million for each quarter
in 2020 that Antero Midstream receives gathering fees on average daily volumes in excess of certain thresholds; and; (ii) for
each quarter in 2021, 2022 and 2023 (a) $12.0 million for each quarter that the Antero Midstream receives gathering fees on
average daily volumes between 2,900 MMcfe/d and 3,150 MMcfe/d, (b) $15.5 million for each quarter that Antero Midstream
receives gathering fees on average daily volumes between 3,150 MMcfe/d and 3,400 MMcfe/d, and (c) $19.0 million for each
quarter that Antero Midstream receives gathering fees on average daily volumes exceeding 3,400 MMcfe/d. Such amendment also
extended the original 20-year initial term by four years to 2038. Antero Resources achieved the threshold in the fourth
quarter of 2021 and the first quarter of 2022 and earned $12 million in each period from Antero Midstream.
For the year ended December 31, 2021, Antero
Midstream received approximately $705 million in fees under the gathering and compression agreement.
Processing
On February 6, 2017, a joint venture was
formed between Antero Midstream and MarkWest Energy Partners, L.P. (“MarkWest”), a wholly owned subsidiary of MPLX,
LP (the “Joint Venture”), to develop processing and fractionation assets in Appalachia. Antero Midstream and MarkWest
each own a 50% interest in the Joint Venture and MarkWest operates the Joint Venture assets. The Joint Venture assets consist of
processing plants in West Virginia and a one-third interest in a recently commissioned MarkWest fractionator in Ohio.
Pursuant to a gas processing agreement between
Antero Resources and MarkWest, MarkWest has agreed to process gas from acreage dedicated by Antero Resources for a fee. MarkWest
has entered into a separate agreement with the Joint Venture whereby the Joint Venture has agreed to perform gas processing services
with respect to certain volumes on behalf of MarkWest in exchange for the gas processing fees that MarkWest receives from Antero
Resources in connection with such volumes (the “MW-JV Arrangement”). During the year ended December 31, 2021, the Joint
Venture derived approximately $240 million of revenues from Antero Resources under the MW-JV Arrangement.
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- 2022 Proxy Statement 63 |
Right of First Offer Agreement
On November 10, 2014, Antero Resources entered
into a right of first offer agreement with Antero Midstream for gas processing services pursuant to which Antero Resources agreed,
subject to certain exceptions, not to procure any gas processing or NGLs fractionation services with respect to Antero Resources’
production (other than production subject to a pre-existing dedication) without first offering Antero Midstream the right to provide
such services. On February 6, 2017, in connection with the formation of the Joint Venture, Antero Resources and Antero Midstream
amended and restated the right of first offer agreement to, among other things, amend the list of conflicting dedications set forth
in such agreement to include the gas processing arrangement between Antero Resources and MarkWest. On February 13, 2018, Antero
Resources and Antero Midstream further amended and restated the right of first offer agreement to make certain clarifying changes
to reflect the original intent of the agreement.
Water Services Agreement
On September 23, 2015, Antero Resources entered
into a water services agreement with Antero Midstream, pursuant to which Antero Midstream agreed to provide through certain of
its subsidiaries certain water handling and treatment services to Antero Resources within an area of dedication in defined service
areas in Ohio and West Virginia, and Antero Resources has agreed to pay fees for those services on a monthly basis. The initial
term of the water services agreement is twenty years, automatically renewable from year to year thereafter.
Under the water services agreement, Antero
Resources committed to pay a fee on a minimum volume of fresh water deliveries through 2019, which commitments have since expired
in accordance with the terms of the water services agreement. Fees payable to Antero Midstream under the water services agreement
are based on the volume of fresh water delivered thereunder and the services provided by Antero Midstream thereunder. Antero Resources
also agreed to pay Antero Midstream a fixed fee per barrel for wastewater treatment at Antero Midstream’s wastewater treatment
facility, which was idled in the third quarter of 2019, and a fee per barrel for wastewater collected in trucks owned by Antero
Midstream, in each case subject to annual CPI-based adjustments. In addition, Antero Midstream contracts with third-party service
providers to provide Antero Resources other fluid handling services including flow back and produced water services and Antero
Resources will reimburse Antero Midstream for its third-party out-of-pocket costs plus 3%. In addition to the foregoing, Antero
Midstream has the right to elect to be paid for certain services under the water services agreement on a cost of service basis
designed to generate a specified rate of return. For the year ended December 31, 2021, Antero Midstream received approximately
$219 million in fees under the water services agreement.
Under the water services agreement, Antero
Resources may sell, transfer, convey, assign, grant, or otherwise dispose of dedicated properties free of the dedication, provided
that the number of net acres of dedicated properties so disposed of, when added to the number of net acres of dedicated properties
previously disposed of free of the dedication since the effective date of the agreement, does not exceed the aggregate number of
net acres of dedicated properties acquired by Antero Resources since such effective date. Accordingly, under certain circumstances,
Antero Resources may dispose of a significant number of net acres of dedicated properties free from dedication without Antero Midstream’s
consent.
On February 12, 2019, Antero Resources and
Antero Midstream amended and restated the water services agreement to, among other things, make certain clarifying changes with
respect to the CPI and the associated adjustments to the fees Antero Midstream will receive from Antero Resources under the water
services agreement.
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- 2022 Proxy Statement 64 |
Secondment Agreement
In 2019, Antero Midstream entered into the
Amended and Restated Secondment Agreement with Antero Resources. Under this agreement, Antero Resources agreed to provide seconded
employees to us or one of our respective direct or indirect subsidiaries to perform certain operational services with respect to
the gathering and compression, processing, and NGLs fractionation facilities and water assets, including serving as common paymaster
with respect to the seconded employees, and we agreed to reimburse Antero Resources for expenditures Antero Resources incurs performing
those operational services. The initial term of the agreement runs through November 2034, automatically renewable from year to
year thereafter. For the year ended December 31, 2021, Antero Midstream reimbursed Antero Resources for approximately $9 million
of direct and indirect costs and expenses incurred on our behalf pursuant to the secondment agreement.
Services Agreement
In 2019, Antero Midstream entered into the
Second Amended and Restated Services Agreement with Antero Resources, pursuant to which Antero Resources agreed to provide certain
corporate, general and administrative services to Antero Midstream, including serving as common paymaster, in exchange for reimbursement
of any direct and indirect costs and expenses associated with providing such services. The initial term of this agreement runs
through November 2034, automatically renewable from year to year thereafter. For the year ended December 31, 2021, Antero Midstream
reimbursed Antero Resources for approximately $32 million of direct and indirect costs and expenses incurred on our behalf pursuant
to the services agreement.
License
Pursuant to a license agreement with Antero
Resources, Antero Midstream has the right to use certain Antero Resources-related names and trademarks in connection with the operation
of its midstream business.
Other Agreements
From time to time, in the ordinary course
of business, Antero Midstream participates in transactions with Antero Resources and other third parties in which Antero Midstream
may be deemed to have a direct or indirect material interest. These transactions include, among other things, agreements that address
the provision of midstream services and receipt of contract operating services; the purchase of fuel for use in Antero Midstream’s
operations; the release of midstream service dedications in connection with acquisitions, dispositions or exchanges of acreage;
consent to the extension of existing services being provided by third parties; the construction of certain pipelines and facilities;
and the acquisition of assets and the assumption of liabilities by us, our subsidiaries and our unconsolidated affiliates. While
certain of these transactions are not the result of arm’s-length negotiations, we believe the terms of each of the transactions
are, and specifically intend the terms to be, generally no more or less favorable to either party than those that could have been
negotiated with unaffiliated parties with respect to similar transactions. During the year ended December 31, 2021, Antero Midstream
received an aggregate of $9 million and made no payments in connection with such transactions.
Employment
Timothy Rady, Senior Vice President—Land
of Antero Midstream and the son of Paul M. Rady, the Chairman, Chief Executive Officer and President of Antero Midstream, provided
services to us in 2021. Total compensation paid to Timothy Rady and allocated to Antero Midstream in 2021 consisted of base salary,
bonus and other benefits totaling $114,247 and award grants under the AM LTIP having an aggregate grant date fair value of $249,994,
which are subject to certain time-based vesting conditions.
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- 2022 Proxy Statement 65 |
QUORUM AND VOTING
Voting Stock
Antero Midstream’s common stock is
the only outstanding class of securities that entitles holders to vote generally at meetings of Antero Midstream’s stockholders.
Each share of common stock outstanding on the record date entitles the holder to one vote at the Annual Meeting. Stockholders do
not have the right to cumulate their votes for election of Directors. Holders of shares of Series A Preferred Stock are not entitled
to vote such shares at the Annual Meeting.
Quorum
The presence, in person online or by proxy,
of the holders of a majority of the votes eligible to be cast at the Annual Meeting is necessary to constitute a quorum. Abstentions
and broker non-votes (described below) will be counted for purposes of determining whether a quorum is present at the Annual Meeting.
If a quorum is not present, the chairman has the power to adjourn the Annual Meeting from time to time, without notice other than
an announcement at the Annual Meeting, until a quorum is present. At any annual meeting reconvened following an adjournment at
which a quorum is present, any business may be transacted that might have been transacted at the annual meeting as originally scheduled.
Stockholder List
Antero Midstream will maintain at its corporate
offices in Denver, Colorado a list of the stockholders entitled to vote at the Annual Meeting. The list will be open to the examination
of any stockholder, for purposes germane to the Annual Meeting, during ordinary business hours for ten days before the Annual Meeting.
In addition, the list of stockholders will be available during the Annual Meeting through the meeting website.
Vote Required
Only stockholders of record at the close
of business on April 18, 2022, have the right to vote at the Annual Meeting. The proposals at the Annual Meeting will require the
following votes:
Proposal |
|
Vote required |
|
Voting options |
|
Can brokers
vote without
instructions? |
|
Effect of abstentions and
broker non-votes |
|
Election of directors |
|
Each nominee must receive a plurality of the votes cast |
|
For all nominees Withhold authority for all nominees For all except |
|
No |
|
None. |
|
Ratification of the selection of the independent registered public accounting firm |
|
Affirmative vote of a majority of the shares counted as present and entitled to vote |
|
For
Against
Abstain |
|
Yes |
|
Abstentions will have the effect of a vote “against.” There should not be broker non-votes. |
|
Advisory approval of the compensation of the Named Executive Officers |
|
Affirmative vote of a majority of the shares counted as present and entitled to vote |
|
For
Against
Abstain |
|
No |
|
Abstentions will have the effect of a vote “against.” Broker non-votes will not have any effect. |
|
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- 2022 Proxy Statement 66 |
An automated system that Broadridge Investor
Communications Services administers will tabulate the votes.
Brokers who hold shares in street name for
customers are required to vote those shares in accordance with instructions received from the beneficial owners.
NYSE Rule 452 restricts when brokers that
are record holders of shares may exercise discretionary authority to vote those shares in the absence of instructions from beneficial
owners. When brokers are not permitted to vote on a matter without instructions from the beneficial owner, and do not receive such
instructions, the result is a “broker non-vote.”
Default Voting
A proxy that is properly completed and returned
will be voted at the Annual Meeting in accordance with the instructions on the proxy. If you properly complete and return a proxy,
but do not indicate any contrary voting instructions, your shares will be voted in accordance with the Board’s recommendations,
which are as follows:
• |
FOR the election of the two persons named in this Proxy Statement as the Board’s nominees for election as Class III directors; |
• |
FOR the ratification of the selection of KPMG LLP as Antero Midstream’s independent registered public accounting firm for the fiscal year ending December 31, 2022; and |
• |
FOR the approval, on an advisory basis, of the compensation of Antero Midstream’s Named Executive Officers. |
If any other business properly comes before
the stockholders for a vote at the Annual Meeting, your shares will be voted at the discretion of the holders of the proxy. The
Board knows of no matters, other than those previously stated herein, to be presented for consideration at the Annual Meeting.
Revoking Your Proxy
Stockholders of record may revoke their proxy
at any time before the electronic polls close by submitting a later-dated vote online via the Internet, by telephone or by mail;
by delivering instructions to Antero’s Secretary before the Annual Meeting commences; or by voting online in person during
the Annual Meeting. Beneficial stockholders may revoke any prior voting instructions by contacting the broker, bank, or other nominee
that holds their shares prior to the Annual Meeting or by voting online during the meeting.
Solicitation Expenses
We will bear all costs incurred in the solicitation
of proxies, including the preparation, printing and mailing of the Notice of Annual Meeting and Proxy Statement and the related
materials. In addition to solicitation by mail, our directors, officers and employees may solicit proxies personally or by telephone,
e-mail, facsimile or other means, without additional compensation. We have retained MacKenzie Partners, Inc. (“MacKenzie”)
to aid in the solicitation of proxies for an estimated fee of approximately $12,500 and the reimbursement of out-of-pocket expenses.
We have also agreed to indemnify MacKenzie and its representative against certain losses that arise or relate to MacKenzie’s
engagement for the solicitation of proxies.
Copies of the Annual Report
Upon written request, we will provide any
stockholder, without charge, a copy of the Form 10-K, but without exhibits. Stockholders should direct requests to Antero Midstream
Corporation, 1615 Wynkoop Street, Denver, Colorado 80202. Our Form 10-K and the exhibits filed or furnished therewith are available
on our website, www.anteromidstream.com, in the “SEC Filings” subsection of the “Investors” section.
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- 2022 Proxy Statement 67 |
ADDITIONAL INFORMATION
Proxy Materials, Annual Report and Other Information
The Notice of Annual Meeting of Stockholders
and Proxy Statement, along with Antero Midstream’s Annual Report on Form 10-K for the year ended December 31, 2021, filed
with the SEC on February 16, 2022, and Antero Midstream’s 2021 Annual Report to Stockholders are available free of charge
at www.anteromidstream.com in the “SEC Filings” subsection under the “Investors” section. These
materials do not constitute a part of the proxy solicitation material.
Stockholders Sharing an Address
Each registered stockholder (meaning you
own shares in your own name on the books of our transfer agent, American Stock Transfer and Trust Company LLC) will receive one
Notice of Internet Availability (the “Notice”) per account, regardless of whether you have the same address as another
registered stockholder.
If your shares are held in “street
name” (that is, in the name of a bank, broker or other holder of record), applicable rules permit brokerage firms and Antero
Midstream, under certain circumstances, to send one Notice to multiple stockholders who share the same address. This practice is
known as “householding.” Householding saves printing and postage costs by reducing duplicate mailings. If you hold
your shares through a broker, you may have consented to reducing the number of copies of materials delivered to your address. If
you wish to revoke a previously granted “householding” consent, you must contact your broker. If your household is
receiving multiple copies of the Notice and you wish to request delivery of a single copy, you should contact your broker directly.
Stockholder Proposals and Director Nominations for the 2023
Annual Meeting
Any stockholder desiring to present a proposal
at Antero Midstream’s 2023 Annual Meeting of Stockholders and to have the proposal included in Antero Midstream’s related
proxy statement pursuant to Rule 14a-8 must send the proposal to Antero Midstream, c/o Yvette K. Schultz, at 1615 Wynkoop Street,
Denver, Colorado, 80202, so that it is received no later than December 29, 2022. All such proposals should be in compliance with
SEC rules and regulations. Antero Midstream will only include in its proxy materials those stockholder proposals that it receives
before the deadline and that are proper for stockholder action.
In addition, any stockholder entitled to
vote at Antero Midstream’s 2023 Annual Meeting of Stockholders may propose business (other than proposals to be included
in Antero Midstream’s proxy materials) to be included on the agenda of, and properly presented for action at, the 2023 Annual
Meeting of Stockholders if written notice of such stockholder’s intent is given in accordance with the requirements of Antero
Midstream’s bylaws and SEC rules and regulations. Any such proposal must be submitted in writing at the address shown above
so it is received between February 7, 2023 and March 9, 2023.
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- 2022 Proxy Statement 68 |
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