Our Annual Report on
Form 10-K for the fiscal year ended December 31, 2019 is available on our website at www.blackstoneminerals.com in the “SEC Filings” subsection of the “Investors” section. A copy of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2019, including the financial statements and the financial statement schedules, if any, but not including exhibits, will be furnished at no charge to each unitholder to whom a Notice of
Internet Availability of Proxy Materials is delivered upon the written request of such person addressed to Investor Relations at Black Stone Minerals, L.P., 1001 Fannin Street, Suite 2020, Houston, Texas, 77002.
At the recommendation of the Nominating and Governance Committee of the Board, the Board of the General Partner has nominated the following individuals for election as directors of the Board
of the General Partner, each to serve until the 2021 Annual Meeting and thereafter until such
director’s successor shall have been duly elected and qualified, or until such director’s earlier death, resignation, or removal:
Carin M. Barth
Thomas L. Carter, Jr.
D. Mark DeWalch
Jerry V. Kyle, Jr.
Michael C. Linn
John H. Longmaid
William N. Mathis
William E. Randall
Alexander D. Stuart
Allison K.
Thacker
Each director nominee is currently serving on the Board of the General Partner. Certain individual qualifications and
skills of our directors that contribute to the Board’s effectiveness as a whole are described below in
each director’s biographical information under the heading “Executive Officers and
Directors.”
The election of directors in this
Proposal 1 requires the affirmative vote of a plurality of the votes cast by the unitholders entitled to vote at the Annual Meeting. Each unitholder entitled to vote at the Annual Meeting is entitled to cumulate his or her votes in the election of
directors and give one candidate, or divide among any number of candidates, a number of votes equal to the product of (x) the number of common units and preferred units (on an as-converted basis) held by the unitholder, multiplied by (y) the number
of directors to be elected at the Annual Meeting. Abstentions and broker non-votes will have no effect on the election of directors. In addition, as described below under
“Majority Voting
Policy,” each of the incumbent director nominees is required to tender his or her resignation as a
director if he or she fails to receive at least a majority vote election to the Board of the General Partner.
Unless otherwise
indicated on the proxy, the persons named as proxies will vote
“FOR ALL” of the nominees listed above. Although we have no reason to believe that any of the nominees will be unable to
serve if elected, should any of the nominees become unable to serve prior to the Annual Meeting, the proxies will be voted for the election of such other persons as may be nominated by the Board of the General Partner.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR ALL” OF THE DIRECTOR NOMINEES.
The following table shows information for the executive officers and directors of the General Partner. Executive officers serve at the discretion of the Board. Directors hold office until
their successors are duly elected and qualified. There are no family relationships among any of our directors or executive officers.
Name
|
Age as of the Annual Meeting
|
Position With The General Partner
|
Thomas L. Carter, Jr.*
|
68
|
Chairman and Chief Executive Officer
|
Jeffrey P.
Wood
|
49
|
President and Chief Financial
Officer
|
Steve Putman
|
45
|
Senior Vice
President, General Counsel, and Secretary
|
Dawn K.
Smajstrla
|
49
|
Vice President and Chief Accounting
Officer
|
William G. Bardel
|
80
|
Director
|
Carin M.
Barth*
|
57
|
Director
|
D. Mark
DeWalch*
|
58
|
Director
|
Ricky J. Haeflinger
|
64
|
Director
|
Jerry V. Kyle, Jr.*
|
59
|
Director
|
Michael C.
Linn*
|
68
|
Director
|
John H.
Longmaid*
|
74
|
Director
|
William N.
Mathis*
|
54
|
Director
|
William E. Randall *
|
53
|
Director
|
Alexander D.
Stuart*
|
69
|
Director
|
Allison K. Thacker*
|
46
|
Director
|
|
|
*
|
Nominated
for election to the Board at the 2020 Annual Meeting
|
Thomas L.
Carter, Jr. Mr. Carter has served as Chairman and Chief Executive Officer of the General Partner since November 2014. Mr. Carter served as President of the General Partner from November 2014 to June 2018. Mr. Carter founded BSMC, our predecessor, and served as President, Chief Executive Officer, and Chairman of Black Stone Natural Resources,
L.L.C. (“BSNR”), the former general partner of BSMC, from 1998 to
2015. Mr. Carter served as Managing General Partner of W.T. Carter & Bro. from 1987 to 1992 and Black Stone Energy Company from 1980 to present, both of which preceded the General Partner. Mr. Carter founded Black Stone Energy Company, BSMC’s operating and exploration subsidiary, in 1980. From 1978 to 1980, Mr. Carter served as a lending officer in the Energy Department of Texas Commerce Bank in Houston, Texas, after serving in
various other roles from 1975. Mr. Carter received M.B.A. and B.B.A. degrees from the University of Texas at Austin. Mr. Carter served as a director of Carrizo Oil & Gas Inc. from
2005 to 2019. He has served in various capacities at Episcopal High School in Houston, Texas since 2004,
including as a Trustee and a member of its executive committee. Mr. Carter currently serves on Episcopal High School’s advisory board and as a Trustee Emeritus of The Lawrenceville School. Mr. Carter also serves on the University Lands Advisory Board.
Mr.
Carter’s extensive industry and executive management experience and his background in finance qualify
him to serve on the Board of the General Partner.
Jeffrey P. Wood. Mr. Wood has served as President and Chief Financial Officer of the General Partner since June 2018 and November 2016, respectively. Mr. Wood served as Senior Vice President of the General
Partner from November 2016 to June 2018. Mr. Wood has over 20 years of senior financial leadership and capital markets experience, most recently as Executive Vice President and Chief Financial Officer of Siluria Technologies, Inc., a leading innovator of process technologies for the energy and petrochemical industries. Prior
to Siluria, Mr. Wood was Senior Vice President and Chief Financial Officer of Eagle Rock Energy Partners, a
publicly traded master limited partnership with upstream, midstream, and minerals operations. Prior to Eagle Rock, Mr. Wood spent 11 years at Lehman Brothers Holdings, Inc. in a number of investment banking and investment management positions
focused primarily on the MLP sector. Mr. Wood started his career in public accounting with Price Waterhouse
LLP. He has an MBA from the University of Chicago, Booth School of Business and a BA from Baylor University.
Mr. Wood also serves as a member of the board of directors of the general partner of USD Partners LP and serves as Chairman of the audit committee and as a member of the conflicts committee.
Steve Putman. Mr. Putman has served as Senior Vice President, General Counsel, and Secretary of the General Partner since November 2014. Mr. Putman served as Senior Vice President, General Counsel, and
Secretary of BSNR from 2013 to 2015. Prior to joining BSMC, Mr. Putman was Managing Director and General Counsel of Quintana Capital Group from 2008 to 2013 and Vice President,
General Counsel, and Secretary of Quintana Maritime Limited from 2005 to 2008. He also worked as an associate at Vinson & Elkins L.L.P. from 2001 to 2005 and Mayer Brown LLP from 2000 to 2001. Mr. Putman received a B.A. from the University of
Texas at Austin and a J.D. from the University of Chicago. He is licensed to practice law in the states of Texas and Illinois.
Dawn K. Smajstrla. Ms. Smajstrla has served as Vice President and Chief Accounting
Officer of the General Partner since September 2015. Prior to joining the General Partner, she was employed at LRR Energy, LP from December 2013 to September 2015 as Vice President, Controller, and Chief Accounting Officer. She also worked at Goodrich Petroleum from 2010 through 2013 as Vice President,
Controller, and Principal Accounting Officer. Ms. Smajstrla was employed by Anadarko Petroleum from 2008 to 2010 in financial reporting and corporate audit roles. Prior to joining Anadarko, Ms. Smajstrla worked in various financial reporting and
corporate accounting roles for 13 years. Ms. Smajstrla received B.S. and M.B.A. degrees from The University of Houston. Ms. Smajstrla is a Certified Public Accountant.
William G. Bardel. Mr. Bardel has served as director of the General
Partner since March 2015. Mr. Bardel served as director of BSNR from 2004 to 2015. He has acted as a financial consultant to a number of educational institutions since 2006. He
previously served as the Chief Financial Officer of the Lawrenceville School, a preparatory high school in Lawrenceville, New Jersey, from 1994 until 2006. The Lawrenceville School had an annual budget of $40 million and an endowment of $200
million. Mr. Bardel served as a director of Hudson City Bancorp, Inc. from 2003 to 2015. From 1988 until
1994, Mr. Bardel was the head of the Government Advisory Group of Lehman Brothers in London, England. From
1984 to 1994, Mr. Bardel served as a managing director of Lehman Brothers. A graduate of Yale University, Mr.
Bardel has a Masters degree from Oxford University where he was a Rhodes Scholar. Mr. Bardel received his J.D. from Harvard Law School.
Mr. Bardel brings valuable expertise to the Board of the General Partner due to his high level of familiarity with financial
control issues and strategic planning, including time as a director for financial institutions.
Carin M. Barth. Ms. Barth has served as a director of the General Partner since
March 2015. She has served as President of LB Capital, Inc., a private capital firm she co-founded in 1988,
since 2005. She has also served on the boards of directors of Enterprise Products Holdings LLC since 2015;
Group 1 Automotive, Inc. since 2017; BBVA USA Bancshares, Inc. (a subsidiary of BBVA Group) since 2020; and
The Ronald McDonald House of Houston since 2007, and she has served as a trustee of The Welch Foundation since 2012. Ms. Barth served on the boards of directors of
Halcón Resources Corporation from April 2019 to October 2019; Strategic Growth Bank Incorporated and its affiliate Capital Bank, N.A., a community banking operation, from 2010 to 2017; Western Refining, Inc., a public crude oil refiner and marketer of
refined products, from 2006 to 2016; and the Bill Barrett Corporation, a public oil and natural gas exploration and development company, from 2012 to 2016. From 2008 to 2014, she served as a Commissioner to the Department of Public Safety for the State of Texas. She served as a member of the Board of Regents of Texas Tech University from 1999 to 2005 and was
Chairman of the University’s endowment from 2001 to 2005, 2006 to 2010, and was again appointed as
Chairman in 2012 to 2018. During 2004 to 2005, Ms. Barth took a leave of absence from LB Capital, Inc., to
serve as Chief Financial Officer of the U.S. Department of Housing and Urban Development in Washington, D.C. From September 2006 to July 2007, she also served as Interim Senior Vice President of Finance and Administration (CFO) at Texas Southern
University. Ms. Barth also served as a director of Encore Bancshares, Inc., a financial holding and wealth management company, from 2009 to 2012 and Amegy Bank of Texas from 2006 to 2009. Except as listed above, Ms. Barth has not served as a
director of a publicly traded company or a registered investment company in the past five years. Ms. Barth received a B.S. from the University of Alabama, summa cum laude, and a M.B.A. from the Owen Graduate School of Management at Vanderbilt
University.
Ms. Barth’s experience in varied financial matters, including as chief financial officer for several entities, her experience with mergers and acquisitions, her experience in operating a private capital
company and her service on numerous public and private company boards are key attributes, among others, that make her well qualified to serve on the Board of the General Partner.
D. Mark DeWalch. Mr.
DeWalch has served as director of the General Partner since March 2015. Mr. DeWalch served as director of BSNR from 2009 to 2015. Mr. DeWalch has served as
Executive Vice President and Chief Financial Officer of DeWalch Technologies, Inc. since 1993 and has been a
co-owner of DeWalch Technologies, Inc. since 1995. Mr. DeWalch has served on the board of directors of
DeWalch Technologies, Inc. since 1985. Mr. DeWalch also serves as President of DeWalch Holdings LLC and is co-owner of DeWalch Holdings
LLC. Mr. DeWalch is Executive Vice President and co-owner of DeWalch FM LLC. Mr. DeWalch began his career in commercial banking in New York with the Irving Trust Company where he served as a lending officer. Mr.
DeWalch received M.B.A. and B.B.A. degrees from the University of Texas at Austin.
Mr. DeWalch provides valuable financial expertise to the Board of the General Partner due to his background in commercial banking, as well as a unique operational perspective due to his experience with
DeWalch Technologies, Inc.
Ricky J. Haeflinger. Mr. Haeflinger has served as a director of the
General Partner since March 2015. Mr. Haeflinger served as a director of BSNR from January 2013 to 2015. Since 2012 and 2011, respectively, he has served as a Senior Investment Officer and
Assistant Treasurer for Mayo Clinic, a non-profit, world-wide leader in medical care, research, and education, where he also has responsibility for certain investment relationships and for Mayo Clinic Treasury Services operations, including the
custodial relationship, actuarial relationship, issuance of corporate debt, and banking relationships. Mr. Haeflinger has worked continuously in the finance department of the Mayo Clinic for 26 years. Mr. Haeflinger has also served as director
and Vice President of Latigo Petroleum, LLC, an independent oil and gas exploration and development company with headquarters in Odessa, Texas, since 2013.
Mr. Haeflinger brings financial expertise to the
Board of the General Partner, as he holds an Accounting degree and an M.B.A. from Winona State University, and he has 25 years’ experience working in the finance department at the Mayo Clinic.
Jerry V. Kyle, Jr. Mr. Kyle has served as director of the General Partner since
March 2015. Mr. Kyle served as director of BSNR from January 2013 to 2015. Mr. Kyle has been a Partner at
Orrick, Herrington & Sutcliffe LLP since March 2018. From 2002 until February 2018, Mr. Kyle was a Partner at Andrews Kurth Kenyon LLP. Mr. Kyle received his J.D. from the University of Texas School of Law in 1990 and his B.A. from The Colorado College in 1984. He is a member of the Texas Bar Foundation and the
Austin Bar Association.
Mr. Kyle’s extensive experience as a lawyer practicing in matters related to finance, lending, securities issuance and regulation, and legislative and regulatory affairs qualify him to serve on the
Board of the General Partner.
Michael C. Linn. Mr. Linn has served as a director of the General Partner since March 2015. Mr.
Linn served as director of BSNR from January 2013 to 2015. Mr. Linn is the founder of Linn Energy LLC and
served as a director of Linn Energy LLC from December 2011 to 2016. Prior to such time, he was Executive Chairman of the board of directors of Linn Energy LLC since January 2010 and Chairman and Chief Executive Officer of Linn Energy, LLC from
December 2007 to January 2010. Following his retirement as Executive Chairman of the board of Linn Energy LLC
in December 2011, Mr. Linn formed MCL Ventures LLC, a private investment vehicle that focuses on purchasing oil and natural gas royalty interests as well as non-operated interests in oil and natural gas wells. Mr. Linn has served as President and
CEO of MCL Ventures LLC since 2012. Mr. Linn has also served as a member of the board of directors and
Chairman of the compensation committee of Nabors Industries Ltd. since 2012, a senior advisor to Quantum Energy Partners since 2012 and a member of the board of managers of Cavallo Mineral Partners, LLC and Wireline Holding Company, LLC. Mr. Linn
served as a member of the board of directors and Chairman of the conflicts committee of Western Refining GP, LLC from 2013 to 2017, a member of the board of directors of Centrica plc from June 2013 to April 2016, and Chairman of the SHESEC Committee of Centrica plc, and as a member of
the board of directors and compensation committee of Jagged Peak Energy from 2017 to 2019. Mr. Linn received his J.D., cum laude, from the University of Baltimore School of Law in
1977 and his B.A. cum laude from Villanova University in 1974.
Mr. Linn’s many years of experience as the Chief Executive Officer of a publicly traded oil and natural gas master limited
partnership, as well as his deep industry knowledge and prior public company board experience, make him particularly well suited to serve on the Board of the General Partner.
John H. Longmaid. Mr.
Longmaid has served as director of the General Partner since March 2015. Mr. Longmaid served as director of W.T. Carter & Bro., a predecessor to BSMC, then BSNR from 1984 to 2015. He has been the President of John Longmaid Designs, Inc., a Maine corporation since 1982. Mr. Longmaid holds a B.S. degree in physics/environmental science from the University of Puget Sound with additional studies in physical chemistry, advanced math, and engineering. He attended post
graduate studies at Washington State University.
Mr.
Longmaid brings a wealth of experience to the Board of the General Partner due to his continuous membership
on the board of directors of W.T. Carter & Bro., as well as BSNR, where he gained experience overseeing
entities in the oil and natural gas industry.
William N. Mathis. Mr. Mathis has served as director of the General Partner since March 2015. Mr. Mathis served as director of BSNR from 2009 to 2015. Since 2001, he has been the managing partner of Conti Street Partners LLC, an investment company in Houston, Texas. He has served on the board of Highland Resources, Inc.
since 2004 and the board of The GRB Partnership since 1998, and has been chairman of Australis Aquaculture
LLC since 2009. He has also served as managing member of Wellspring Energy Partners, L.P. since 2012. Mr. Mathis served on the board of Wilson Industries Inc. from 1994 to 1998, Paradigm Services LP from 1998 to 2008, and EnTouch Communications from 1999 to 2007. In addition, Mr. Mathis served on the board and executive committee of Davidson
College and currently serves on the boards of The Museum of Fine Arts – Houston, The Chinquapin School, The Brown Foundation Inc. of Houston, The Texas Medical Center, and Texas Children’s Hospital. Mr. Mathis is a graduate of Davidson College.
Mr. Mathis’s extensive experience in the oil and natural gas industry as well as extensive director-level corporate governance expertise qualify him to serve on the Board of the General
Partner.
William E. Randall. Mr. Randall has served as director of the General Partner since June 2017. Mr. Randall has been a commercial real estate developer since 2001, and owns, manages, and leases retail shopping
centers in the greater Houston, Texas area in various single purpose entities not affiliated with the Partnership. Additionally, Mr. Randall is an active manager in family investments, including venture capital, farming and ranching operations, and
stock portfolios. Mr. Randall is a Captain in the Naval Reserve and serves as a member of Naval Reserve Task Force 17. Mr. Randall has over 30 years of service in active
and reserve component commands leading troops in combat and peace time operations. Mr. Randall currently serves on the board of Annunciation Orthodox School – Houston, The Beacon of Downtown Houston, and the Wayne Duddlesten Foundation. Mr. Randall received his B.S. from the United States Naval Academy in 1990 and M.B.A. from Rice
Business School in 2001.
Mr. Randall provides valuable investment and acquisition expertise to the Board of the General Partner
due to his background in commercial real estate development, as well as a unique perspective due to his service as a Captain in the Naval Reserve.
Alexander D. Stuart. Mr. Stuart has served as director of the General Partner since
March 2015. Mr. Stuart served as director of BSNR from 1990 to 2015. He has been the President of North Star
Investments, an investment firm responsible for identifying and managing a wide variety of assets, since 2004 and has served as the managing partner of RDS Investments, a limited partnership with extensive holdings in private equity, venture capital, real estate, energy, and publicly traded stocks and bonds since 2005. Mr. Stuart became a
trustee of Lake Forest College in 2012 and St. Andrews School in 2009 and serves on the endowment committees for both institutions. Since 2006, Mr. Stuart has been a director of Northwestern Lake Forest Hospital and is also a member of the
investment committee for the parent organization, Northwestern Memorial Hospital. Mr. Stuart received his A.B. from Princeton University and his M.B.A. from Harvard Business School.
Mr. Stuart’s investment management experience
and experience serving as a director of BSNR qualify him to serve on the Board of the General
Partner.
Allison K. Thacker. Ms. Thacker has served as director of the General Partner since March 2015. Ms. Thacker served as director of
BSNR from January 2013 to 2015. She joined Rice University in 2011 as Vice President for Investments and
Treasurer and President of the Rice Management Company with the responsibility of managing a $5.5 billion endowment fund. Prior to joining Rice University, Ms. Thacker spent 11 years with RS Investments, a San Francisco-based investment firm
specializing in public equities. At RS Investments, Ms. Thacker held roles including portfolio manager, managing director, and research analyst. In the earlier portion of her career, Ms.
Thacker served as a summer analyst at Putnam Investments and as a financial analyst in the energy investment banking group at Merrill Lynch & Co. She was a founding board member of KIPP Heartwood Academy, a college preparatory charter school serving East San Jose, California and is currently a member
of the KIPP Houston Advisory board and the Houston Ballet board of trustees. Ms. Thacker is a graduate of
Harvard Business School, where she received an M.B.A. She has a B.A. degree in economics with honors from Rice University.
Ms.
Thacker brings significant financial expertise to the Board of the General Partner due to her extensive prior experience in investment management as well as her experience as a board member of BSNR.
The
Board of the General Partner believes that sound governance practices and policies provide an important framework to assist it in fulfilling its duty to unitholders. Our Corporate Governance Guidelines cover the following principal
subjects:
-
the size of the Board;
-
qualifications and independence standards for the Board;
-
director responsibilities;
-
meetings of the Board and of non-management directors;
-
committee functions and independence of committee members;
-
compensation of the Board;
-
self-evaluation and succession planning;
-
unitholder communications with directors; and
-
access to management and to independent advisors.
The Corporate
Governance Guidelines are available on our web site at www.blackstoneminerals.com under
the “Corporate
Governance” subsection of the
“Investors” section. The Corporate Governance Guidelines will be reviewed periodically and as necessary by our Nominating and Governance Committee, and any proposed additions to or amendments of the
Corporate Governance Guidelines will be presented to the Board of the General Partner for its approval.
The NYSE has adopted
rules that require listed companies to adopt governance guidelines covering certain matters. We believe that the Corporate Governance Guidelines comply with the NYSE rules.
The Board’s leadership structure does not separate the Chief Executive Officer and Chairman of the Board positions. The Board
retains the authority to modify this structure as and when appropriate, and it is possible that the Board may decide to separate the Chief Executive Officer and Chairman of the Board positions in the future.
The Board believes that there is no single, generally accepted approach to providing Board leadership and that each of the possible
leadership structures for a board must be considered in the context of the individuals involved and the specific circumstances facing a company as the right leadership structure may vary as circumstances change. The Board currently is of the view
that it is in our best interest for the Chief Executive Officer to also serve as the Board’s Chairman.
Mr. Carter serves as our Chief Executive Officer as well as Chairman of the Board. As the director most familiar with our business and industry and most capable of effectively identifying strategic priorities, he is best positioned to lead the Board
through reviews of key business and strategic issues.
The Board of the General Partner holds regular executive sessions in which the non-management directors meet without any members of management present. The purpose of these executive sessions
is to promote open and candid discussion among the non-management directors. The director who presides at these meetings, the Lead Director, is elected by the Board and serves for a two-year term. Mr. Bardel currently serves as Lead Director and was elected in 2019. The Lead Director is responsible for preparing an agenda
for the meetings of the non-management directors in executive session. Currently, all the non-management directors of the Board are independent under the listing requirements of the NYSE.
Risk Oversight
Procedures
The Board of the General Partner as a whole oversees our assessment of major risks and the measures taken to manage
such risks. For example, the Board:
-
oversees our long-term strategic plans, assesses risks that would cause us to fail to achieve our strategic plans and reviews strategies to mitigate those risks;
-
oversees management of our exposure to commodity prices through
regular review of our hedging position and hedging policy;
-
monitors our liquidity profile and our compliance with the financial
covenants contained in our borrowing arrangements; and
-
has established specific dollar limits on the commitment authority
of members of management for certain transactions and requires Board approval of expenditures exceeding that authority and of other material contracts and transactions.
The Audit Committee is responsible for overseeing and discussing with management our guidelines and policies with respect to risk assessment and risk management, including our major financial
risk exposures and the steps management has taken to monitor and control such exposures as well as the risks associated with our hedging strategy. The Compensation Committee is responsible for reviewing our incentive compensation arrangements to
determine whether they encourage excessive risk-taking. It also reviews and discusses the relationship between risk management policies and practices and compensation and evaluates compensation policies and practices that could mitigate any such
risk. The Board of the General Partner does not consider its role in oversight of our risk management function to be relevant to its choice of leadership structure.
The Board has
determined that Mr. Bardel, Ms. Barth, Mr. DeWalch, Mr. Haeflinger, Mr. Kyle, Mr. Linn, Mr. Longmaid, Mr. Mathis, Mr.
Randall, Mr. Stuart, and Ms. Thacker are independent as defined by the rules of the NYSE.
The Board of
the General Partner has the following standing committees: Audit Committee, Compensation Committee, and Nominating and Governance Committee. The Board will appoint a conflicts committee as necessary. The Audit Committee, the Compensation Committee,
and the Nominating and Governance Committee each have a written charter approved by the Board of the General Partner. Each of these written charters is available on our web site at www.blackstoneminerals.com under the “Corporate Governance” subsection of the “Investors” section. Summaries of the functions performed by and the membership of each committee of the Board are set forth
below.
Name
|
Audit
Committee
|
Compensation
Committee
|
Nominating &
Governance
Committee
|
William G.
Bardel*
|
|
X
|
|
Carin M.
Barth**
|
Chair
|
|
|
Thomas L. Carter, Jr.
|
|
|
|
D. Mark DeWalch
|
|
|
X
|
Ricky J. Haeflinger
|
X
|
|
|
Jerry V. Kyle,
Jr.
|
X
|
|
|
Michael C. Linn
|
|
X
|
|
John H. Longmaid
|
|
X
|
|
William N. Mathis
|
|
|
Chair
|
William E.
Randall
|
X
|
|
|
Alexander D. Stuart
|
|
Chair
|
|
Allison K.
Thacker
|
|
|
X
|
* Lead Director
** Financial Expert
Audit Committee
We have an
audit committee of four members, and all its members meet the independence and experience standards established by the NYSE and Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Ms. Barth and Messrs. Haeflinger, Kyle, and Randall currently sit on the Audit Committee, with Ms. Barth acting as the Committee Chair. The
Board has also determined that Ms. Barth qualifies as an “audit committee financial expert,” as such term is defined under Securities and Exchange Commission (“SEC”) rules.
The Audit Committee assists the Board in its oversight of
(i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements,
(iii) qualifications and independence of our independent registered public accounting firm, and (iv) performance of our internal audit function and independent registered public accounting firm. The Audit Committee has the sole authority to retain
and terminate our independent registered public accounting firm, approve all auditing services and related fees and the terms thereof performed by our independent registered public accounting firm, and pre-approve any non-audit services and tax
services to be rendered by our independent registered public accounting firm. The Audit Committee is also responsible for confirming the independence and objectivity of our independent registered public accounting firm. Our independent registered
public accounting firm is given unrestricted access to the Audit Committee and our management, as necessary.
Compensation Committee
Because
we are a limited partnership, we are not required by the rules of the NYSE to have a compensation committee or a compensation committee composed entirely of independent directors. However, we nevertheless have a compensation committee, and all of
its members meet the independence standards established by the NYSE. Messrs. Bardel, Linn, Longmaid, and Stuart currently sit on the Compensation Committee, with Mr. Stuart acting as the Committee
Chair.
The Compensation Committee reviews and determines the compensation for the executive officers of the General Partner and
reviews and makes recommendations to the Board of the General Partner regarding director compensation. The Compensation Committee also administers our incentive compensation and equity-based benefit plans.
The Compensation Committee is delegated all authority of the Board of the General Partner as may be required or advisable to fulfill its
purposes. The Compensation Committee may delegate to any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. Meetings may, at the discretion of the
Compensation Committee, include members of management, other members of the Board, consultants or advisors, and such other persons as the Compensation Committee believes to be necessary or appropriate. The Compensation Committee will consult with
our Chief Executive Officer when evaluating the performance of, and setting the compensation for, our executive officers other than the Chief Executive Officer.
The Compensation Committee may, in its sole discretion, retain and determine funding for legal counsel, compensation consultants, as well as other experts and advisors (collectively, “Committee Advisors”), including the authority to retain, approve the fees payable to, amend the engagement with and terminate any Committee Advisor, as it deems necessary or appropriate to fulfill its
responsibilities. In 2019, the Compensation Committee engaged Frederick W. Cook & Co., Inc. (“FW
Cook”) directly as its independent compensation consultant to assist the Committee with its
responsibilities related to our executive officer and director compensation programs. A representative of FW Cook attends Compensation Committee meetings, as requested, and communicates with the Chair of the Compensation Committee between meetings.
However, the Compensation Committee makes all decisions regarding the compensation of our executive officers and directors. FW Cook reports directly to the Compensation Committee and all work conducted by FW Cook for us is on behalf of the
Compensation Committee.
The Compensation Committee regularly reviews the services provided by its outside
consultant and believes that FW Cook is independent under applicable SEC rules in providing executive compensation consulting services. In making this determination, the Committee noted that during fiscal 2019:
-
FW Cook
did not provide any services to us or our management other than services requested by or with the approval of the Compensation Committee, which were limited to executive officer and director compensation consulting;
-
FW Cook maintains a conflicts policy, which was provided to the
Compensation Committee, with specific policies and procedures designed to ensure independence;
-
We have been advised by FW Cook that the fees we paid to FW Cook in 2019 were less than 1% of FW Cook’s total consulting income for that period;
-
None of the FW Cook consultants working on our matters had any business or personal relationship with any Compensation Committee members;
-
None of the FW Cook consultants working on our matters had any
business or personal relationship with any of our executive officers; and
-
None of the FW Cook consultants working on our matters owns our units.
The Compensation Committee continues to monitor the independence of FW Cook on a periodic basis.
Nominating & Governance Committee
Because we are a limited partnership, we are not required by the rules of the NYSE to have a nominating and governance committee or a nominating and governance committee composed entirely of
independent directors. However, we nevertheless have a nominating and governance committee, and all its members meet the independence standards established by the NYSE. Ms. Thacker and Messrs. Mathis and DeWalch currently sit on the Nominating and Governance Committee, with Mr. Mathis acting as the Committee
Chair.
The Nominating and Governance Committee identifies individuals qualified to serve on the Board of the General Partner
and recommends director nominees for each annual meeting of limited partners or for appointment to fill vacancies, oversees our governance policies, and oversees the evaluation of the Board and its committees.
Conflicts Committee
At least one independent member of the Board will serve on a conflicts committee, as necessary, to review specific matters that the Board
believes may involve conflicts of interest. The Conflicts Committee will determine if the resolution of the conflict of interest is, in its subjective belief, not adverse to our interest. The members of the Conflicts Committee may not be officers or
employees of the General Partner or directors, officers, or employees of its affiliates and must meet the independence standards established by NYSE and the Exchange Act rules to serve on an audit committee of a board of directors, along with the
requirements in the Partnership Agreement. Any matters approved by the Conflicts Committee will be conclusively deemed to be approved by us and all our unitholders and not a breach by the General Partner of any duties or contractual obligations it
may owe us or our unitholders.
During the 2019 fiscal year, the Board of the General Partner held
six regularly scheduled and special meetings of the full Board, the Audit Committee held seven meetings, the Compensation Committee held
four meetings and the Nominating and Governance Committee held four meetings. All incumbent directors attended at least 75% of the aggregate number of meetings of the Board and
committees of the Board on which they served.
Directors are encouraged, but not required, to attend the annual meetings of limited partners. Eleven directors attended the Partnership’s 2019
annual meeting.
Director Nominations
Nominations of persons
for election to the Board of the General Partner may be made at an annual meeting of the limited partners or, provided that the Board or unitholders have determined that directors will be elected at such a meeting, a special meeting of the limited
partners, in any such case only pursuant to the General Partner’s notice of meeting (or any supplement
thereto), (a) by or at the direction of the Board or any committee thereof, or (b) by any unitholder or group of unitholders who (1) is entitled to vote at the meeting, (2) complies with the notice procedures set forth in the Partnership Agreement,
and (3) either individually or as a group hold units representing at least 10% of the outstanding units (measured on a fully diluted basis and treating the preferred units on an as-converted basis) both at the time of giving notice of such
nomination and at the meeting.
The Board believes that all directors must possess a considerable amount of management
experience (such as experience as an executive), a solid financial background, and oil and gas related business or investment experience. The Nominating and Governance Committee is responsible for establishing criteria for the selection of new Board
members and identifying (taking into account all factors the Committee considers appropriate), evaluating, and recommending candidates to the Board of the General Partner for prospective Board membership. The Committee also considers matters
relating to the retirement of Board members, including term limits or age limits, attendance at Board and committee meetings, conflicts of interest, and other relevant factors. The Nominating and Governance Committee does not have a formal policy
with respect to diversity.
We have adopted
a Majority Voting Policy, which provides that any incumbent nominee for director in an uncontested election (i.e., an election where the only nominees are those recommended by the Board) who receives a greater number of votes “withheld” from his or her election than votes
“for” such election (a “Majority Withheld
Vote”) shall promptly, but in any case, no later than five (5) business days following the
certification of the unitholder vote, tender his or her resignation for consideration by the Nominating and Governance Committee.
The Nominating and Governance Committee will promptly consider the tendered resignation and, as soon as reasonably practicable following
the date of the Nominating and Governance Committee’s receipt of such resignation, but in any case, no
later than 45 calendar days following certification of the unitholder vote, will recommend to the Board of the General Partner whether to accept the tendered resignation or to take some other action, such as rejecting the tendered resignation and
addressing the apparent underlying causes of the Majority Withheld Vote. In making this recommendation, the Nominating and Governance Committee will consider all factors deemed relevant by its members, including the underlying reasons why
unitholders
“withheld” votes for the director (if ascertainable), the length of service and qualifications of the director whose resignation has been tendered, the director’s contributions to the Partnership, whether by accepting such resignation we will no longer be in compliance with
any applicable law, rule, regulation, or governing document, and whether or not accepting the resignation is in the best interests of us and our unitholders.
The Board of the General Partner will act on the Nominating and Governance Committee’s recommendation promptly, but in any case, no later than 120 days following the certification of the unitholder vote. In consideration of the Nominating and Governance Committee
recommendation, the Board will consider the factors considered by the Nominating and Governance Committee and such additional information and factors the Board of the General Partner deems relevant. We will promptly publicly disclose the
Board’s decision and process in a periodic or current report filed with or furnished to the
SEC.
Any director who, in accordance with the Majority Voting Policy, tenders his or her resignation, will not participate in
the Nominating and Governance Committee recommendation or Board consideration regarding whether or not to accept the tendered resignation. However, such director shall remain active and engaged in all other Nominating and Governance Committee and
Board activities, deliberations, and decisions during this Nominating and Governance Committee and Board process.
If a majority
of the members of the Nominating and Governance Committee received a Majority Withheld Vote at the same election, then the independent directors who are on the Board of the General Partner and who did not receive a Majority Withheld Vote will act as
the Board of the General Partner for the purpose of considering the tendered resignations and will decide whether to accept or reject them.
Communication with the Board
A holder of our
units or other interested party who wishes to communicate with the directors of the General Partner may do so by sending communications to the Board, any committee of the Board, the Lead Director, the Chairman of the Board, or any other director by
telephone at (713) 445-3200, or in writing to 1001 Fannin Street, Suite 2020, Houston, Texas, 77002 by marking the envelope containing each communication as “Unitholder Communication with Directors” and
clearly identifying the intended recipient(s) of the communication. Communications will be relayed to the intended recipient of the Board except in instances where it is deemed unnecessary or inappropriate to do so pursuant to our Corporate
Governance Guidelines, which are available on our website at www.blackstoneminerals.com
in the “Corporate
Governance” subsection under the
“Investors” section. Any communications withheld under those guidelines will nonetheless be retained and available for any director who wishes to review them.
We have a Code of Business
Conduct and Ethics that applies to our directors, officers, and employees as well as a Financial Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and the other senior financial officers,
each as required by NYSE and SEC rules. Each of the foregoing is available on our website at www.blackstoneminerals.com in the “Corporate Governance” subsection of the “Investors” section. We will provide copies,
free of charge, of any of the foregoing upon receipt of a written request to Investor Relations at Black Stone Minerals, L.P., 1001 Fannin Street, Suite 2020, Houston, Texas 77002. We intend to disclose amendments to and waivers, if any, from our
Code of Business Conduct and Ethics and Financial Code of Ethics, as required, on our website, www.blackstoneminerals.com, promptly following the date of any such amendment or waiver.
Under our Code of Business Conduct and Ethics, a director is expected to bring to the attention of the General Counsel any conflict or potential conflict of interest that may arise between the
director or any affiliate of the director, on the one hand, and us or the General Partner on the other. The resolution of any conflict or potential conflict should, at the discretion of the Board and in light of the circumstances, be determined by a
majority of the disinterested directors.
In addition, under the Code of Business Conduct and Ethics, any executive officer is
required to avoid conflicts of interest unless approved in advance by the Board.
Certain Relationships and Related Party Transactions
We employ Fowler Carter, the son of Mr. Carter, Chairman and Chief Executive Officer of the General Partner, as Director, New Ventures, and he received total compensation from us of approximately $282,666
during the year ended December 31, 2019. We also employ Stephen Fox, the son-in-law of Mr. Carter, as a Landman, and he received total compensation from us of approximately
$180,067 during the year ended December 31, 2019.
Insider Trading Policy
We have an insider trading policy, which prohibits directors, officers, employees, and consultants from engaging in hedging or
monetization transactions, whether direct or indirect, involving our securities, regardless of whether such persons are in possession of material, non-public information. Transactions involving Partnership-based derivative securities, including
options, warrants, unit appreciation rights, convertible notes, or similar rights whose value is derived from the value of an equity security, are also prohibited. This policy does not restrict holding, exercising, or settling awards such as
options, restricted units, or other derivative securities granted under a Partnership equity incentive plan.