UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

CONTINENTAL RESOURCES, INC.

(Name of Registrant as Specified In Its Charter)

NOT APPLICABLE

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Continental Resources, Inc.

Invitation to 2019 Annual Meeting of Shareholders

April 4, 2019

Dear Fellow Shareholder:

Please join me at our Annual Meeting on Thursday, May 16, 2019, where you will be asked to vote on: (i) the election of the two Class I members named in this Proxy Statement to the Board of Directors; (ii) the ratification of the selection of the independent auditors; and (iii) the approval, by a non-binding vote, of the compensation of our named executive officers. You will also be asked to consider a shareholder proposal, if properly presented at the Annual Meeting.

The Company is again taking advantage of the Securities and Exchange Commission rule permitting us to provide proxy materials over the internet to certain of our shareholders. On or about April 4, 2019, we will begin mailing a Notice of Internet Availability of Proxy Materials to shareholders whose shares are held in an account at a brokerage firm, bank or other nominee record holder, informing you the Notice and Proxy Statement for the 2019 Annual Meeting, 2018 Annual Report and voting instructions are available online. As more fully described in that Notice, all shareholders receiving such Notice may choose to access proxy materials on the internet or may request paper copies of the proxy materials. On or about April 4, 2019, we will also mail paper copies of our Notice and Proxy Statement, 2018 Annual Report and a proxy card to each shareholder whose shares are registered directly in their name with our transfer agent, American Stock Transfer & Trust Company.

In addition to the formal items of business at the Annual Meeting, you will have an opportunity to ask questions and express your views to senior management of Continental Resources, Inc. Members of our Board of Directors will also be present.

Whether you are able to attend the 2019 Annual Meeting in person, it is important your shares be represented. Please vote your shares in accordance with the instructions contained in the materials being sent to you. Please vote as soon as possible.

I hope to see you on May 16th.

Harold G. Hamm

Chairman of the Board and

Chief Executive Officer

CONTINENTAL RESOURCES, INC.

20 N. Broadway

Oklahoma City, Oklahoma 73102

Notice of Annual Meeting of Shareholders

To Be Held On May 16, 2019

TO THE HOLDERS OF SHARES OF COMMON STOCK:

The 2019 Annual Meeting of Shareholders of Continental Resources, Inc. (the “Company,” “we,” “our,” or “us”) will be held at the Skirvin Hilton Hotel, Continental Room, 1 Park Avenue, Oklahoma City, OK 73102, on May 16, 2019, at 10:00 a.m. C.D.T., for the following purposes:

The Annual Meeting may be recessed from time to time and, at any reconvened meeting, action on the matters specified in this notice may be taken without further notice to shareholders unless required by the Company’s bylaws.

Shareholders of record, at the close of business on March 21, 2019, of our common stock, par value $0.01 per share, are entitled to notice of and to vote on all proposals at the Annual Meeting. A list of all shareholders entitled to vote at the Annual Meeting will be available for inspection at the Annual Meeting and during normal business hours at least ten days prior thereto at our offices located at 20 N. Broadway, Oklahoma City, Oklahoma 73102.

In accordance with rules adopted by the Securities and Exchange Commission, we are pleased to furnish these proxy materials to certain of our shareholders over the internet and to certain others by mail.

BY THE ORDER OF THE BOARD OF DIRECTORS

/s/ Eric S. Eissenstat

Eric S. Eissenstat

Secretary

DATED: April 4, 2019

CONTINENTAL RESOURCES, INC.

TABLE OF CONTENTS

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Proxy Summary

This summary contains highlights about Continental Resources, Inc. and our subsidiaries (the “Company”) and the upcoming 2019 Annual Meeting of Shareholders (the “Annual Meeting”). This summary does not contain all of the information you should consider in advance of the Annual Meeting and we encourage you to read the entire Proxy Statement before voting. When we refer to “us,” “we,” or “our,” we are referring to the Company.

2019 Annual Meeting of Shareholders

Voting Matters and Board Recommendations

2018 Performance Highlights

Achieved full-year 2018 production growth of 23% compared to 2017.

2018 fourth quarter production increased 13% compared to 2017 fourth quarter production.

Net cash provided by operating activities for 2018 increased 66% compared to 2017.

Year-end 2018 proved reserves increased 15% (adjusted for 2018 divestitures) compared to year-end 2017.

In 2018, reduced total debt by $585 million and increased cash on hand by $239 million compared to December 31, 2017.

In October 2018, entered into a minerals venture that allows the Company to enhance project economics and further capitalize on its geologic knowledge and land expertise.

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Key Executive and Director Compensation Policies and Practices

Independent compensation consultants to the Compensation Committee.

No individual employment agreements.

Majority of compensation is in the form of restricted stock awards designed to align interests of executives and shareholders.

Robust stock ownership requirements – 5x of base salary for the Chief Executive Officer and President and 3x of base salary for other executive officers, and 5x base annual retainer for directors.

Use of a relevant peer group in establishing compensation.

Minimal perquisites.

Prohibition of hedging of Company securities by executive officers and directors.

Clawback policy applicable to all executive officers.

Key Governance Policies and Practices

Voluntary establishment of Compensation and Nominating/Corporate Governance Committees, even though exempt from these requirements as a controlled company under New York Stock Exchange (“NYSE”) rules.

Audit and Compensation Committees composed entirely of independent directors.

Lead independent director with clearly established authority and responsibility over the governance of our Board of Directors.

Four of six directors are independent.

Regular executive sessions of the Board without management present.

Board risk management oversight with a focus on the most significant risks facing the Company.

Annual evaluation process for the Board and its committees.

Director in uncontested election that does not receive a majority of “for” votes, must submit his or her resignation for consideration by the Nominating/Corporate Governance Committee and the Board.

For more detailed information regarding our proxy materials and voting at the Annual Meeting, see “Questions and Answers About This Proxy Material and Voting,” at page 48.

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Proposal 1:

Election of Directors

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We are a “controlled company” within the meaning of the listing standards of the NYSE because a limited liability company owned by our Chairman and Chief Executive Officer, Harold G. Hamm, and members of his family own more than 50% of our outstanding shares of Common Stock. Consequently, we are not required to comply with certain NYSE listed company requirements, such as the requirement to have a majority of independent directors on our Board, or the requirement to have compensation and nominating committees comprised entirely of independent directors. However, we are required to have an independent Audit Committee, and we have voluntarily established a Compensation Committee comprised entirely of independent directors and a Nominating/Corporate Governance Committee. The Board uses the independence standards of the NYSE corporate governance rules generally applicable to directors for determining whether directors are independent. A copy of those standards is attached as Annex A. The Board additionally follows applicable rules of the Securities and Exchange Commission (“SEC”) in determining independence for committee members. The Board has determined Messrs. Berry, McCain, McNabb and Monroe have no relationship with the Company other than as a director and shareholder and are independent under the NYSE and SEC rules for purposes of service on the Board and its committees. Mr. Gallogly, whose term expired at the 2018 Annual Meeting, was determined to be independent on the same basis as described above, during the time of his service. Ms. Lambertz is not an independent director due to her relationship to Mr. Hamm and her current service as our Vice President, Human Resources. Members of each committee are elected annually by the Board and serve for one year terms, until their successors are elected and qualified or until their earlier resignation or removal.

The Board held 7 meetings and acted by unanimous consent 3 times during the year ended December 31, 2018. Directors are expected to attend all meetings of the Board and the committees on which they serve. To be re-nominated, directors must have attended at least 75% of the Board and applicable committee meetings during their term, and all directors did so during 2018, with each director attending all Board and committee meetings. All then incumbent directors attended the 2018 Annual Meeting of Shareholders and all directors plan to attend the 2019 Annual Meeting. Under our Corporate Governance Guidelines, attendance at the Annual Meeting is listed as an indicator to be considered when evaluating whether a director is devoting sufficient time to his or her responsibilities.

 Board Leadership Structure    Harold G. Hamm serves as the Company’s Chairman and Chief Executive Officer. Additionally, through Harold Hamm Family LLC (the “Family LLC”), a limited liability company owned by Harold G. Hamm, members of his family and trusts established for their benefit and for which Mr. Hamm serves as manager, Mr. Hamm exercises voting and dispositive power over approximately 75.15% of our outstanding shares of Common Stock as of March 21, 2019. The Board believes this leadership structure is appropriate because of the efficiencies of having the Chief Executive Officer also serve in the role of Chairman of the Board, Mr. Hamm’s role in founding the Company, and Mr. Hamm’s ongoing control of a significant financial interest in the Company through the Family LLC.

 Lead Director    The Board has appointed Mr. Monroe to serve as lead director with the following responsibilities similar to those typically performed by an independent Chairman: (i) presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; (ii) acts as a key liaison between the Chairman and Chief Executive Officer and the independent directors; (iii) provides input into the materials to be delivered to the directors in advance of each Board meeting; (iv) provides feedback regarding the quality, quantity, and timeliness of those materials; and (v) communicates Board member feedback to the Chairman and Chief Executive Officer. At the February 2019 Board meeting, Mr. Monroe was re-appointed to serve as lead director, effective immediately following the Annual Meeting for a period extending through the 2020 Annual Meeting.

 Risk Oversight    The Board is responsible for overseeing our Company’s management of risk. The Board strives to effectively oversee our enterprise-wide risk management in a way that balances managing risks while enhancing the long-term value of our Company for the benefit of our shareholders. The Board understands its focus on effective risk oversight is critical to setting our Company’s tone and culture towards effective risk management. To administer its oversight function, the Board seeks to understand our Company’s risk philosophy by having regular discussions with management to establish a mutual understanding of our Company’s overall appetite for risk. The Board maintains an active dialogue with management, including the Chief Executive Officer, Chief Financial Officer, and Chief Risk Officer, about existing risk management processes and how management identifies, assesses and manages our most significant risk exposures, including commodity price risk, liquidity risk, reputational risk, operational risk, safety risk, cybersecurity risk, compliance risk and legal risk. The Board appointed Eric S. Eissenstat in May 2014 as Chief Risk Officer to further enhance the Company’s enterprise risk management. Mr. Eissenstat is primarily responsible for instituting risk management practices consistent with our overall business strategy and risk profile. The Board expects, and receives, regular updates from Mr. Eissenstat and other members of our management team about our most significant risks so as to enable it to evaluate whether management is responding appropriately. For example, senior management attends Board meetings and is available to address any questions or concerns raised by our Board on risk management-related and other matters. In addition, our Board receives presentations from senior management on strategic matters.

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The Board also relies on each of its committees to help oversee the risk management responsibilities relating to the functions performed by such committees. The Audit Committee considers risks related to financial reporting including overseeing our internal controls and interacting with our independent public accounting firm at least quarterly. The Compensation Committee oversees our compensation practices to ensure they do not encourage unnecessary and excessive risk taking by management. The Nominating/Governance Committee oversees risks relating to our corporate governance and compliance programs and assists the Board and management in promoting an organizational culture that encourages commitment to ethical conduct and a commitment to compliance with the law. Each of the Board’s committees report regularly to the Board on risk-related matters within its responsibilities. While the Board does not directly consider the Company’s risk profile and management program in assessing its leadership structure, a board member’s ability to oversee the risks associated with the matters supervised by a committee is considered in making committee appointments.

 Board Committees   Our Board has three standing committees: (i) an Audit Committee; (ii) a Compensation Committee; and (iii) a Nominating/ Corporate Governance Committee. Each committee is governed by a written charter approved by the full Board. These charters form an integral part of our corporate governance policies and are available on our website, www.CLR.com.

The tables below provide information regarding the current composition of each standing committee of our Board, the significant responsibilities of each committee as set forth in their respective charters and the number of times each committee met or acted by written consent in 2018:

Name of Committee and Members		Principal Functions of the Committee						Meetings       in 2018		Written Consents in 2018
Audit*   Mark E. Monroe, Chairman† William B Berry Lon McCain†		The Audit Committee is appointed by our Board to perform an oversight function. Pursuant to its Charter, the responsibilities of the Audit Committee are:						9		1
				select and oversee our relationship with our independent registered public accounting firm;
				review with our independent registered public accounting firm the scope and results of our annual audit and any other reviews conducted by such firm;
				discuss our earnings releases and guidance with financial management;
				review our financial statements and reports including Forms 10-K and Forms 10-Q as well as any major issues regarding accounting principles;
				review significant financial reporting issues and practices;
				monitor internal control policies and practices;
				establish procedures for receipt, consideration, and treatment of issues raised regarding accounting, internal accounting control or auditing matters;
				review our major financial risk exposures;
				review proposals of related party transactions;
				review and approve internal audit plan and budget;
				approve decisions regarding appointment and removal of chief audit executive; and
				review the effectiveness and performance of our internal audit function.

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Additional Information Regarding the Audit Committee. Pursuant to its Charter, the Audit Committee has the authority to retain outside counsel or other experts to advise the Committee in connection with the exercise of its powers and responsibilities. In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Audit Committee meets at least quarterly with our senior management, our director of internal audit and our independent auditors to discuss any matters the Audit Committee or any of these individuals or groups believe should be discussed in private. The Audit Committee makes regular reports to the Board.

In 2018, the Audit Committee discussed the financial information contained in each quarterly and annual SEC filing with the Chief Financial Officer and independent auditors prior to public release.

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Additional Information Regarding the Compensation Committee. The role the Compensation Committee plays in establishing our executive officer compensation is further described below in “Executive Compensation and Other Information—Compensation Discussion and Analysis.” The Compensation Committee has the authority to retain or terminate consultants, including the authority to approve the consultants’ fees and other retention terms. In 2018, the Compensation Committee employed Longnecker & Associates (“Longnecker”), and Grant Thornton, LLP (“Grant Thornton”) whose engagements are described in the Compensation Discussion and Analysis section herein.

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We have adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics in accordance with the rules of the NYSE. We last amended our Corporate Governance Guidelines in May 2018 and our Code of Business Conduct and Ethics in September 2014. The Code of Business Conduct and Ethics is applicable to all employees and directors, including our principal executive, financial, and accounting officers. In addition, each of the standing committees of the Board has a charter which has been approved by the Board. Copies of the Corporate Governance Guidelines, Code of Business Conduct and Ethics, and committee charters are available on our website, www.CLR.com, and a printed copy of any of these documents will be made available to any shareholder requesting one from our Secretary.

Our Corporate Governance Guidelines require the non-management directors to meet in regularly scheduled executive sessions. Mr. Monroe was selected by the Board to serve as lead director through the 2019 Annual Meeting and, acting in that capacity, he presided over 3 executive sessions in 2018. At the February 2019 Board meeting, Mr. Monroe was re-appointed to serve as lead director, effective immediately following the Annual Meeting for a period extending through the 2020 Annual Meeting.

Each year, the Board and its committees perform a rigorous self-evaluation. As required by the Company’s Corporate Governance Guidelines, the Nominating/Corporate Governance Committee oversees this process. The performance evaluations solicit input from directors regarding the effectiveness of the Board, its committees and individual directors. The input is sought in order to provide directors an opportunity to identify strengths, weaknesses and opportunities for improvement. The Company’s General Counsel has individual conversations with each member of the Board and reviews each director’s responses to questions distributed to the director in advance of the conversation. The General Counsel then summarizes the results of the interviews and presents this information to the Nominating/Corporate Governance Committee. Subject to limited exceptions, the summary is prepared in a manner that assures the content isn’t identifiable as the feedback of any given director. The Nominating/Corporate Governance Committee reviews the summary and develops recommendations for presentation to the Board, as appropriate. The General Counsel and the Chairman of the Nominating/Corporate Governance Committee present the results of the self-evaluation and any recommendations for improvement to the Board. The Board then discusses the information presented and adopts any recommended improvements determined to be necessary or desirable by the Board. The Board believes the process described above is effective and improves the overall function and effectiveness of the Board.

Any shareholder or interested party desiring to communicate or express concerns to us, directors generally, non-management directors or an individual director may do so only by submission in writing to Continental Resources, Inc., Attn: Secretary, 20 N. Broadway, Oklahoma City, Oklahoma 73102, with information sufficient to identify the person submitting the communication or concern, including the name, address, telephone number, and an e-mail address (if applicable), together with information indicating the relationship of such person to us. Our Secretary is responsible for maintaining a record of any such communications or concerns and submitting them to the appropriate person(s) for potential action or response. We will verify the authenticity of any communication or concern before submission. We are not obligated to investigate or submit any anonymous submissions from persons who are not our employees. We have established robust policies in connection with whistleblower complaints submitted by employees and non-employees and we have established procedures designed to ensure we effectively follow such policies.

Although we are a “controlled company” under the listing standards of the NYSE, the Board has voluntarily established a Nominating/Corporate Governance Committee. Our Nominating/Corporate Governance Committee is responsible for assessing the skills and characteristics of Board members and for screening potential Board candidates. While the Nominating/Corporate Governance Committee has no minimum qualifications for candidates, the Committee generally reviews and evaluates both incumbent and potential new directors to achieve diversity of skills and experience among our directors, based on the following criteria set forth in our Corporate Governance Guidelines:

commitment and background to represent shareholder interests;

moral character and integrity;

ability to apply sound business judgment;

independence and freedom from conflicts of interest;

ability to devote time necessary to understand the Company and carry out the duties of a director, including attendance at meetings and consultation on Company matters;

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ability to function as a team member and communicate effectively;

professional and personal accomplishments;

understanding of strategic issues;

ability to understand financial matters and read financial statements;

oil and gas exploration and energy experience; and

experience with risk assessment.

Qualified candidates for nomination to the Board are considered without regard to race, color, religion, gender or national origin. The process used by the Nominating/Corporate Governance Committee for identifying and evaluating nominees for the Board consists of reviewing qualifications of candidates suggested by management, other Board members, shareholders, or other sources. In evaluating nominees, the Nominating/Corporate Governance Committee considers whether it has been successful in achieving the desired diversity of skills and experience based on the then current composition of the Board. The Nominating/Corporate Governance Committee will consider recommendations for nomination as a Board member by any shareholder of the Company who is a shareholder of record at the time of giving notice to the Company as provided in the Company bylaws (the “Bylaws”), is entitled to vote on the election of directors at the meeting, and complies with the notice procedures set forth in our Bylaws. Such nominations shall be made pursuant to timely notice in writing to Continental Resources, Inc., Attn: Secretary, 20 N. Broadway, Oklahoma City, Oklahoma 73102.

To be timely, a shareholder’s notice shall be delivered to or mailed and received at our principal executive office (i) with respect to an election of directors to be held at the annual meeting of the shareholders of the Company, not later than ninety (90) days or more than one hundred twenty (120) days prior to the one year anniversary date of the preceding year’s annual meeting of shareholders of the Company; provided, however, if the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, to be timely, a shareholder’s notice must be so delivered not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made; and (ii) with respect to a special meeting of shareholders called for the purpose of electing one or more directors to the Board, not earlier than the ninetieth (90^th) day prior to such special meeting and not later than the close of business on the later of the seventieth (70^th) day prior to such special meeting or the tenth (10^th) day following the day on which public announcement of the date of the special meeting is first made. Such shareholder’s notice to the Secretary shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, all information relating to the person required to be disclosed in solicitations for proxies for election of directors, or is otherwise required, pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including the written consent of such person to be named in the proxy statement as a nominee and to serve as a director if elected), and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Company’s books, of such shareholder, and (ii) the class and number of shares of capital stock of the Company that are beneficially owned by the shareholder.

There are no specific minimum qualifications for shareholder nominees. The Company has not previously received nominees from shareholders. All nominees, regardless of source, will be evaluated by the Nominating/Corporate Governance Committee in the same manner and using the same criteria as is used for nominees recommended by the committee.

The Compensation Committee consists of Messrs. Berry, McCain and McNabb. Mr. Gallogly served on the Committee until the conclusion of the 2018 Annual Meeting of Shareholders. There were no other changes to the composition of the Committee during 2018. During 2018, there were no interlocking relationships as defined by the SEC.

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Certain Relationships and Related

Party Transactions

Our Audit Committee Charter provides the Audit Committee shall review all related party transactions (as defined below) and recommend approval or disapproval to the Board of any such transaction.

The Charter defines a “related party transaction” as a transaction, proposed transaction, or series of similar transactions, in which (a) we are a participant, (b) the amount involved exceeds $120,000 annually and (c) a related person (as defined below) has or will have a direct or indirect material interest. A “related person” is (a) any person who is, or at any time since the beginning of our last fiscal year was, a director, executive officer, or nominee to become a director, (b) a person known to beneficially own 5% or more of any class of our voting securities, (c) an immediate family member of any of the foregoing persons (which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law), and (d) any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee for director or greater than 5% beneficial owner. The Audit Committee considers the adequacy of disclosure and fairness to us of the matters considered.

The Audit Committee has adopted a written policy which includes factors for committee members to consider in exercising their business judgment including (a) terms of the transaction with the related party, (b) availability of comparable products or services from unrelated third parties, (c) terms available from unrelated third parties and (d) the benefits to us. The Audit Committee recommends for approval only those related party transactions that are, in its business judgment, in our best interests and on terms no less favorable to us than we could have achieved with an unaffiliated party.

In 2018, we participated in the related party transactions described below. Based upon the review and recommendations of our Audit Committee, or of our Board, or other committee thereof in the case of the transactions described in the following sentence, we believe the transactions described below are in our best interests and are on terms no less favorable to us than we could have achieved with an unaffiliated party. Our Audit Committee reviewed and recommended each of the transactions described below except that a Special Committee of the Board reviewed and recommended the registration rights agreement described below under “Registration Rights Agreements—Wheatland Transaction Registration Rights Agreement;” and the full Board reviewed and recommended the registration rights agreement described below under “Registration Rights Agreements—Initial Public Offering Registration Rights Agreement.”

Royalty and Common Ownership

In 2018, we received approximately $213,000 from the Harold G. Hamm Trust (the “Hamm Revocable Trust”), a trust of which Harold G. Hamm, our Chief Executive Officer and Chairman of the Board, is the trustee and sole beneficiary, for billings on interests owned in various oil and gas wells which we operate. We also disbursed to the Hamm Revocable Trust approximately $527,000 in 2018 for the Hamm Revocable Trust’s share of oil and gas sales attributed to these interests which were received from the purchasers of production. At December 31, 2018, approximately $63,000 was due from the Hamm Revocable Trust and approximately $38,000 was due to the Hamm Revocable Trust.

Aircraft Related Matters

From time to time, we have used the aircraft of Transwestern Transports, LLC (“Transwestern”), an entity owned by Mr. Hamm, to facilitate efficient transportation of personnel. In 2018, we paid Transwestern approximately $529,000 for use of its aircraft and reimbursement of expenses and owed approximately $161,000 to Transwestern at December 31, 2018.

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Registration Rights Agreements

Initial Public Offering Registration Rights Agreement. In connection with the closing of our initial public offering in May 2007, we entered into a registration rights agreement with the Hamm Revocable Trust and the two irrevocable trusts established for the benefit of Mr. Hamm’s children pursuant to which we granted to the trusts certain demand and “piggyback” registration rights. The Hamm Revocable Trust and the two irrevocable trusts identified above transferred the securities subject to this registration rights agreement to the Family LLC in September 2015 (the “September Transfer”). As a result, the rights of the Hamm Revocable Trust and the two irrevocable trusts under this registration rights agreement may be assigned to the Family LLC at the direction of these entities. Under the registration rights agreement, each holder of securities covered by the registration rights agreement has the one time right to require us to file a registration statement for the public sale of all or part of the shares of Common Stock owned by it at any time if at least six months have passed since the last demand registration statement. In connection with a demand by any such holder, the non-demanding parties have the right to participate in such registration process. However, in the event securities are to be sold in an underwritten offering pursuant to such demand registration statement and the managing underwriter thereof advises the participants the amount of securities to be offered thereby should be limited, such limitation shall be satisfied first from the securities allocated to participants other than the demanding party.

If we sell any shares of our Common Stock in a registered underwritten offering, each holder of securities covered by the registration rights agreement has the right to include its shares in that offering. The underwriters of any such offering have the right to limit the number of shares to be included in such sale. We will pay all expenses relating to any demand or piggyback registration, except for underwriters’ or brokers’ commissions or discounts. The securities covered by the registration rights agreement will no longer be registrable under the registration rights agreement if they have been sold to the public either pursuant to a registration statement or under Rule 144 promulgated under the Securities Act of 1933, as amended.

Wheatland Transaction Registration Rights Agreement. In March 2012, the Company entered into a Reorganization and Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Wheatland Oil Inc. (“Wheatland”) and the shareholders of Wheatland. Wheatland is owned 75% by the Hamm Revocable Trust and 25% by Jeffrey B. Hume, the Company’s Vice Chairman of Strategic Growth Initiatives.

Pursuant to the Purchase and Sale Agreement, we entered into a registration rights agreement granting the Hamm Revocable Trust and Mr. Hume registration rights for the shares of Common Stock they received, at the direction of Wheatland, upon the closing of the acquisition (the “Registrable Securities”). The Hamm Revocable Trust transferred the Registrable Securities held by it to the Family LLC as part of the September Transfer. As a result, the rights of the Hamm Revocable Trust under this registration rights agreement may be assigned to the Family LLC at the direction of the Hamm Revocable Trust and Family LLC. Under the registration rights agreement, each holder of Registrable Securities has demand and “piggyback” registration rights. The demand rights enable each of the holders of Registrable Securities to require us to register their respective shares of Registrable Securities with the SEC at any time, subject to certain limited exceptions, including the requirement that the aggregate proceeds from the demand registration exceed $40 million (net of underwriting discounts and commissions) and the Company is not required to effect more than four demand registrations in any three-year period. The piggyback rights allow each of the holders of Registrable Securities to register their Registrable Securities along with any shares we register with the SEC. These registration rights are subject to customary conditions and limitations, including the right of the underwriters of an offering to limit the number of shares.

Shelly Lambertz Compensation

In connection with her service as the Company’s Vice President, Human Resources, Ms. Lambertz receives the following compensation: (i) annual base pay of $265,000, with an annual cash incentive bonus target of 40% of her annual base pay; (ii) a target annual stock grant value of $300,000; and (iii) participation in the Company’s benefits programs on terms consistent with the Company’s standard practices for employees hired at Ms. Lambertz’s level. When employees are hired they typically receive a stock grant equivalent to three years of their annual target value, vesting ratably over a three-year period. The value of the stock awarded to Ms. Lambertz in connection with her employment, is consistent with the Company’s typical practice. For more information regarding the stock awarded to Ms. Lambertz and the director compensation paid to Ms. Lambertz during the period she served as a non-employee director please see “Non-Employee Director Compensation—2018 Non-Employee Director Compensation Table” at page 18 below and “Non-Employee Director Compensation-Equity Based Compensation” at page 19 below. All of the non-employee director compensation received by Ms. Lambertz was reviewed and approved by the Audit Committee. Ms. Lambertz is the daughter of Mr. Hamm.

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Non-Employee Director Compensation

The Compensation Committee reviews annually the total compensation paid to our non-employee directors. The purpose of the review is to ensure the level of compensation is appropriate to attract and retain a diverse group of directors with the breadth of experience necessary to perform our Board’s duties, and to fairly compensate our directors for their service. This review includes consideration of qualitative and quantitative factors. To ensure directors are compensated relative to the scope of their responsibilities, the Compensation Committee considers: (a) the time and effort involved in preparing for Board, committee and management meetings and the additional duties assumed by committee chairs; (b) the risks associated with serving on the Board; and (c) the compensation paid to directors at a peer group of companies as reported by the Compensation Committee’s compensation consultant.

The following table summarizes the compensation of non-employee directors and Ms. Lambertz for the year ended December 31, 2018:

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Directors who are also full-time employees receive no compensation for serving as directors. Mr. Hamm’s compensation for his services as an employee is fully reported within the Summary Compensation Table at page 34. A summary of Ms. Lambertz’s compensation as our Vice President, Human Resources appears in “Certain Relationships and Related Party Transactions—Shelly Lambertz Compensation” at page 17. We reimburse all directors for reasonable out-of-pocket expenses incurred in connection with their services as directors in accordance with our general expense reimbursement policies. Non-employee directors may participate in our medical and dental benefit programs, which are available to all full-time employees, as well as the Company’s non-qualified deferred compensation program (“DCP”).

During 2018, the amount of the base annual retainer was $60,500. The amount of the annual retainer paid to the chair of the Audit Committee was $25,000; the amount of the annual retainer paid to the chair of the Compensation Committee was $15,000; and the amount of the annual retainer paid to the chair of the Nominating/Corporate Governance Committee was $16,000. During 2018, the annual retainer for Audit Committee members was $21,875; the annual retainer for Compensation Committee members was $11,765; and the annual retainer for Nominating/Corporate Governance Committee members (except for Mr. Hamm and Ms. Lambertz) was $10,765. The retainer structure described in this paragraph remains in effect as of the date of this filing.

Any applicable annual retainer was paid quarterly on a pro-rata basis and the amounts appearing in the table above reflect the retainer rate applicable to the quarter in which it was paid. The non-employee directors and Ms. Lambertz did not elect to participate in the DCP during 2018. Information regarding Mr. Hamm’s participation in the DCP can be found in the 2018 Nonqualified Deferred Compensation Table on page 37.

During 2018, the amount of the annual retainer for the position of Lead Director was $12,000 and this rate remains in effect as of the date of this filing.

In addition to cash compensation, we awarded and intend to continue to award restricted Common Stock to each of our non-employee directors. On May 17, 2018, each of our current non-employee directors, were granted 4,183 shares of restricted Common Stock which vest on May 15, 2021. On May 17, 2018, Ms. Lambertz received a grant of 12,549 shares; which vests in increments of 4,183 shares on each of May 15, 2019; May 15, 2020; and May 15, 2021, in connection with her election to the Board as a non-employee director. On October 15, 2018, Ms. Lambertz received an additional grant of 2,820 shares, which vests in increments of 940 shares on each of November 15, 2019; November 15, 2020; and November 15, 2021, in connection with her assuming the role of our Vice President, Human Resources. See Footnote 4 to the 2018 Non-Employee Director Compensation Table on page 18. Mr. Gallogly did not receive a restricted Common Stock grant since he did not serve past the expiration of his term at the 2018 Annual Meeting. Our general practice has been to grant to each non-employee director shares of restricted stock annually, with such shares vesting three years after the date of grant. The number of shares of any future award may be impacted by the value of our stock at the time of the award and other relevant factors. Through the grant of such equity-based compensation, we are able to align a portion of our non-employee directors’ compensation with the performance of our Common Stock.

We have adopted a Common Stock ownership requirement for non-employee directors. Each non-employee director is required to own shares of our Common Stock with a market value equal to at least five times the base annual retainer. In addition, we have a policy which prohibits certain employees and directors from holding our securities in a margin account or pledging our securities as collateral, unless permission is received from our General Counsel in writing, or from engaging in certain transactions which may hedge the value of our securities held by them. For a more detailed discussion of the policy described in the prior sentence, see “Compensation Discussion and Analysis—Long-Term Incentive Awards” on pages 30 and 31 below.

Until the stock ownership guideline is achieved, each non-employee director is required to retain 100% of the shares received as a result of restricted shares granted under our 2005 Long-Term Incentive Plan (the “2005 Plan”) and/or 2013 Long-Term Incentive Plan (the “2013 Plan”). The stock ownership calculation is determined as of December 31 each year based upon the average closing price of the Common Stock for the year compared to the non-employee director’s base annual retainer as of such date. Shares owned directly by, or held in trust for, the non-employee director or his or her immediate family members residing in the same household and unvested restricted shares are included in the calculation. The Compensation Committee reviewed the non-employee directors’ stock ownership and determined as of December 31, 2018, each non-employee director was in compliance with the stock ownership guidelines. The Compensation Committee also determined that as of December 31, 2018 Ms. Lambertz held sufficient shares to satisfy the ownership requirement applicable to non-employee directors.

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Executive Compensation and Other

Information

Our current executive officers are named below:

The information appearing in the table above is as of April 4, 2019.

For a description of the business background and other information concerning Mr. Hamm see “Proposal 1: Election of Directors—General” above.

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The purpose of this Compensation Discussion and Analysis is to explain the Company’s and Compensation Committee’s approach to determining the compensation program for the Company’s Chief Executive Officer, Chief Financial Officer and the other named executive officers appearing in the tables following this discussion (“NEOs”) and to discuss how the 2018 compensation package for these executives was determined. Following this discussion are tables that include compensation information for the NEOs. Mr. Gould resigned from his position as our Senior Vice President, Production and Resource Development on March 6, 2019, effective March 20, 2019. The NEOs for 2018 are as follows:

Harold G. Hamm, Chairman of the Board and Chief Executive Officer;

Jack H. Stark, President;

John D. Hart, Senior Vice President, Chief Financial Officer and Treasurer;

Gary E. Gould, former Senior Vice President, Production and Resource Development;

Patrick W. Bent, Senior Vice President, Drilling;

Executive Summary

In determining individual compensation, we consider the performance of the Company against specific operational and financial factors determined to be relevant for the period in question. We consider competitive market compensation paid by other companies comparable to us in size, geographic location and operations. We maintain and incorporate flexibility into our compensation programs and in the assessment process, which we believe is particularly important in the current commodity price environment, which remains volatile. As such, we do not apply rigid formulas in determining the amount and mix of compensation elements.

In 2018, the Compensation Committee evaluated how the following elements (collectively, the “Primary Compensation Elements”) of our compensation program compare to similar compensation awarded by the then current compensation survey group, with the Compensation Committee considering how the elements of our compensation compare to the target percentiles indicated below. The 2018 target levels were designed to emphasize compensation elements whose value depends on Company performance, with the opportunity for compensation between the 50^th and 75^th percentiles, while aligning the fixed compensation element, base salary, with the 50^th percentile.

Base salary – fixed cash component – generally set at the 50th percentile;

Cash bonus – short-term, variable cash component based on Company and individual performance—individual targets generally set between the 50th and 75th percentile; and

Long-term incentive equity awards – equity component with vesting periods designed to align the interests of executive and shareholders – generally set between the 50th and 75th percentile.

Based on the strength of 2017’s accomplishments, an improving commodity price environment, the need to ensure the Company’s compensation remains competitive with its industry peers and a review of the information customarily provided in connection with the compensation process, the Compensation Committee determined it was appropriate to adjust salaries in 2018. Bonus payments were also made with respect to 2018 based on the Company’s strong financial and operational performance. In determining the final Company performance factors to be used in the bonus calculation, the Compensation Committee considered the Company’s performance with respect to the six bonus pool metrics and the additional factors described below in the discussion of the 2018 bonus. After considering these items, the Compensation Committee determined a Company performance factor of 146% appropriately reflected a balance of (x) the strong results achieved in connection with five of the six bonus pool metrics and (y) the Committee’s assessment of the Company’s performance with respect to the additional factors described below.

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Achieved full-year 2018 production growth of 23% compared to 2017.

2018 fourth quarter production increased 13% compared to 2017 fourth quarter production.

Net cash provided by operating activities for 2018 increased 66% compared to 2017.

Year-end 2018 proved reserves increased 15% (adjusted for 2018 divestitures) compared to year-end 2017.

In 2018, reduced total debt by $585 million and increased cash on hand by $239 million compared to December 31, 2017.

In October 2018, entered into a minerals venture that allows the Company to enhance project economics and further capitalize on its geologic knowledge and land expertise.

A discussion of the Company’s performance with respect to the metrics used for the Company’s 2018 annual cash bonus plan appears under the heading, “Annual Cash Bonus” below.

Base Salary – The base salaries of our NEOs were adjusted, on average, 3.76% during 2018, for the reasons described above.

Cash Bonus – For 2018, the individual bonus target levels for Mr. Hamm, Mr. Stark, Mr. Hart, Mr. Gould, and Mr. Bent remained as set in 2017. The Compensation Committee did not adjust the bonus target levels for these individuals as their existing targets were both competitive by comparison to the defined survey group as well as internally equitable. The targets for 2018 are set forth in the table below.

Long-term incentive equity awards – In February 2018, long-term incentive equity awards of restricted stock were made to each of our NEOs, with three-year cliff vesting at a level consistent with or, in the case of Mr. Bent, greater than, the targeted percentiles described above. Mr. Bent’s long-term incentive equity award for 2018 was at the 81st percentile. Mr. Bent’s award reflected the Compensation Committee’s determination that his responsibilities at the Company were greater than those of similarly titled individuals at the peer companies used for comparison purposes. Mr. Gould forfeited his February 2018 award as a result of his departure from the Company.

In addition, awards made to each of the NEOs also reflected the Compensation Committee’s evaluation of the performance of each of the NEOs with respect to the 2018 Performance Factors (as defined below) and other factors described below in connection with the discussion of each of the Primary Compensation Elements.

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The following charts illustrate the various components of total annual compensation for our Chief Executive Officer and the other NEOs as a group, and reflect the following: (i) annual base salary paid for 2018; (ii) the cash bonus for 2018 paid in February 2019; (iii) the grant date fair value of the long-term equity incentive awards granted in 2018 (which is the value of the awards based on accounting principles on the date of grant, and not necessarily reflective of the amounts the NEOs may receive at the time of settlement); and (iv) the other compensation for each NEO included in the Summary Compensation Table below.

Independent compensation consultant engaged by the Compensation Committee;

No individual employment agreements;

Majority of compensation is restricted stock awards with vesting periods designed to align interests of executives and shareholders;

Clawback policy applies to all executive officers;

Robust stock ownership requirements – 5x of base salary for the Chief Executive Officer and President and 3x of base salary for the other executive officers;

Industry-related peer compensation data considered in establishing compensation;

Minimal perquisites; and

Hedging of Company securities by executive officers is not allowed.

Executive Compensation Philosophy

We operate in a highly competitive environment for securing trained and qualified personnel. We believe the loss of the services of members of our senior management could have a material adverse impact on our operations. Accordingly, we have designed our executive compensation program to attract, retain and motivate experienced, talented individuals to achieve our primary business goals, using the business strategies discussed in greater detail in our Annual Report on Form 10-K. We have also designed our executive compensation program to reward our executives for achieving the strategic and business objectives determined to be important to help the Company create and maintain an advantage in a competitive environment. Specifically, the Primary Compensation Elements of our executive compensation program are designed to reward the achievement of these objectives by:

providing objective-driven compensation opportunities that incentivize executives to achieve superior results for the Company and its shareholders;

aligning compensation with the Company’s short- and long-term business objectives; and

emphasizing the use of equity-based compensation to motivate the long-term retention of executives and align their interests with those of shareholders.

We do not apply rigid formulas in determining the amount and mix of compensation elements. For 2018 cash bonuses paid in February 2019, we considered the achievement of financial and operational goals only as part of establishing the aggregate bonus pool from which bonuses were paid to the NEOs and in connection with the determination of the Company multiplier described below in the discussion of the annual cash bonus. In connection with establishing the size of the aggregate bonus pool and determining the final Company multiplier, the Compensation Committee considered the Company’s performance with respect to the six bonus pool metrics

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and the additional factors described below in the discussion of the 2018 bonus. After considering these items, the Compensation Committee determined a Company performance factor of 146% appropriately reflected a balance of (x) the strong results achieved in connection with five of the six bonus pool metrics and (y) the Committee’s assessment of the Company’s performance with respect to the additional factors, with a focus on safety and environmental performance. During 2018, in determining individual compensation, we considered the performance of the Company against the following specific financial and operational factors: production growth, net cash provided by operating activities, return on capital employed, relative total shareholder return, reserve growth and proved developed finding and development cost per barrel of oil equivalent, and the Company’s performance against the key strategic and other initiatives described below in the discussion of the annual cash bonus, which were determined to be consistent with the Committee’s expectations (the “2018 Performance Factors”). We consider competitive market compensation paid by other companies comparable to us in size, geographic location and operations, but do not exclusively rely on such data to determine compensation for the NEOs. We maintain flexibility with respect to our compensation programs and the assessment process. This approach allows us to adjust to an evolving business environment and account for individual performance, which we believe is particularly important in the current dynamic commodity price environment. The total compensation of the Chief Executive Officer, which is significantly higher than our other NEOs, is commensurate with his role in the founding and development of the Company as well as leading the future success of the Company.

Compensation Setting Process

In general, the Compensation Committee evaluates how the Primary Compensation Elements of our compensation program compare to similar compensation awarded by the then current compensation survey group. Although the Compensation Committee’s general approach is to award each element of compensation to align as closely as possible to the percentiles indicated above, the Compensation Committee considers an individual executive officer’s performance and the external business environment, and any final compensation reflects the Compensation Committee’s discretion. The Compensation Committee believes targeting base salary at the 50^th percentile and cash bonus between the 50^th and 75^th percentile results in competitive cash compensation while preserving considerable upside potential in connection with cash bonus awards should Company and individual executive performance merit a higher bonus. The Committee believes targeting long-term incentive equity awards between the 50^th and 75^th percentile helps align overall pay with shareholder interests, by putting greater weight on an element of compensation which directly reflects the performance of the Company. Additional detail regarding the actions of the Compensation Committee with respect to each of the Primary Compensation Elements appears in the discussion of “Elements of Compensation” below.

At the 2018 Annual Meeting, shareholders approved through a non-binding advisory vote, the compensation of our named executive officers. Following the 2017 Annual Meeting, the Board determined to hold an advisory shareholder vote on the compensation of the Company’s named executive officers annually. This pattern will continue until the next required advisory vote on the frequency of shareholder votes on the compensation of executives, which will occur no later than our Annual Meeting of Shareholders in 2023. The Compensation Committee views the 99% vote in favor of approving the compensation of the Company’s named executive officers received in 2018 as a validation of the Company’s approach to executive compensation and determined, subject to the modifications discussed below, it was appropriate to continue structuring the compensation of the Company’s NEOs consistent with its compensation philosophy. A non-binding advisory vote will be conducted again in connection with the Annual Meeting.

During 2018, the Compensation Committee primarily considered the individual performance of our NEOs with regard to 2018 Performance Factors in the determination of each officer’s compensation. Variations in individual awards made to each of the NEOs are impacted by the Compensation Committee’s evaluation of a given NEO’s performance with respect to such factors. In addition, the Committee considers input provided by our Chief Executive Officer and President as described under “Role of Management” below and this process also drives variation in individual awards made to each of the NEOs.

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the overall performance of the Company;

the executive’s contribution to the overall performance of the Company;

the executive’s business responsibilities;

the executive’s compensation relative to other executives;

the executive’s current compensation arrangements; and

the executive’s contribution to enhancing the ability of the Company to generate long-term shareholder value.

Once our Chief Executive Officer and our President have made their compensation recommendations, the Compensation Committee reviews their recommendations and makes any changes it feels are appropriate to adequately meet our compensation objectives and approach on an individual basis. No adjustments were made to our Chief Executive Officer’s compensation by the Board after his compensation was set by the members of the Compensation Committee. The Board, with Mr. Hamm abstaining, unanimously affirmed the cash bonus award and other compensation set by the Compensation Committee for our Chief Executive Officer for services rendered during 2018.

In 2018, the Compensation Committee also retained the services of Grant Thornton. Grant Thornton reported directly to the Compensation Committee in connection with the retained services. During 2018, Grant Thornton provided comparative analysis of how the six bonus pool metrics described below in the discussion of the 2018 bonus compared to metrics used by exploration and production companies comparable to us in terms of revenues, total assets, geographic location and market capitalization. The results of the analysis were summarized for the Compensation Committee in order to provide additional background and context for the Compensation Committee to validate its overall approach to the bonus process, but the information presented did not impact the bonus program or any individual awards. Grant Thornton was paid $31,500 for the services described above. During 2018, Grant Thornton provided audit services, resulting in fees disclosed on page 43 below. The Audit Committee appointed Grant Thornton as the Company’s independent auditor and the Audit Committee approved the engagement of Grant Thornton to provide the services described in this paragraph. Since it was determined that the services could be provided without impairing Grant Thornton’s independence as the Company’s Auditor, and since Grant Thornton has robust processes in place to ensure those who perform services on behalf of its clients are free from conflicts in connection with any work performed, it was determined that the provision of services by Grant Thornton did not present a conflict of interest.

The Compensation Committee has assessed the independence of Longnecker in accordance with standards set forth in rules established by the NYSE and promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and concluded no conflict of interest exists that would prevent Longnecker from independently representing the Compensation Committee. The

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Compensation Committee also assessed the independence of Grant Thornton based on the same standards as described in the prior sentence and concluded there was no conflict of interest that prevented Grant Thornton from independently representing the Compensation Committee in connection with work it performed during 2018.

In selecting the 2018 Survey Group, the Compensation Committee considered the location of operations, market capitalization, revenue, assets, net income, production profile of oil versus gas, as well as other factors to determine the most relevant subset of the E27 Survey Group member companies for comparison purposes. The E27 Survey Group is a group of energy companies that was assembled for the purpose of providing industry participants survey information to be used in making compensation decisions. In February 2018, the time when the majority of each NEO’s compensation for 2018 was determined, the 2018 Survey Group consisted of 21 independent, publicly traded and privately held exploration and production companies with a median revenue of approximately $2.6 billion as of year-end 2017, which is comparable to the Company’s revenue of approximately $3.1 billion for 2017.

Elements of Compensation

The table below describes each of our Primary Compensation Elements, the purpose of each element, and how each element fits within the Company’s compensation philosophy and objectives.

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The salaries listed above went into effect in February 2018, and remained in effect for the remainder of the year. In the future, we expect the base salaries of the NEOs will be reviewed on an annual basis and adjusted as necessary to remain competitive.

Under the CLR Bonus Plan, the bonus pool is initially set based on the aggregate target bonus amount of all employees participating in the CLR Bonus Plan (referred to herein as the “Target Pool Size”). For 2018, the size of the bonus pool was initially set within a range based on the following factors: net cash provided by operating activities (30%); return on capital employed (25%); relative total shareholder return (15%); production growth (15%); reserve growth (10%); and proved developed finding and development cost per barrel of oil equivalent (5%). With respect to the bonuses paid for 2018, the Compensation Committee evaluated the factors of the CLR Bonus Plan described above as presented by management and determined the factors and their respective weightings to be appropriate.

The Compensation Committee has complete discretion to increase, decrease or leave the size of the pool unchanged. In making the determination whether to adjust the size of the pool, the Compensation Committee considered such matters as it deemed relevant, including the Company’s performance against key strategic and other initiatives identified by the Compensation Committee in areas such as health, safety and environmental, production costs and cycle times, maintenance of financial and other ratios, budget compliance and business process improvements. The size of the bonus pool as determined by the Compensation Committee is referred to herein as the “Final Pool Size.” The ratio of the Target Pool Size to the Final Pool Size is used to determine the Company multiplier in the calculation of an individual’s bonus amount under the CLR Bonus Plan.

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For 2018, the Compensation Committee set the Company performance factor based on the following estimates provided to the Committee in connection with the six metrics: net cash provided by operating activities—$3.47 billion; return on capital employed—13.6%; relative total shareholder return – 67^th percentile relative to the peer groups listed below; production growth—23%; reserve growth—13%; and proved developed finding and development cost per barrel of oil equivalent—$11.42. Except for the last metric, the Company’s performance in these areas was above internal expectations and resulted in an initial performance factor of 146% for the Company multiplier portion of the CLR Bonus Plan. The Compensation Committee also reviewed Company performance against the key strategic and other initiatives described in the paragraph above. After consideration, the Committee determined a final Company performance factor of 146% appropriately reflected Company performance for 2018, and struck the appropriate balance between (x) the strong results achieved in connection with five of the six bonus pool metrics described above, and (y) the Committee’s assessment of the Company’s performance with respect to the additional matters described above. In assessing the additional matters, the Compensation Committee gave particular weight to safety and environmental performance. The Compensation Committee determined the Company’s performance with respect to the key strategic and other initiatives was consistent with its expectations for 2018, and determined it was not necessary to adjust the initial performance factor of 146%. Proved developed finding and development cost per barrel of oil equivalent represents the Company’s net exploration and development costs incurred for wells having first production in 2018 divided by the net estimated recoverable reserves for those wells expressed in barrels of oil equivalent. Return on capital employed represents net income attributable to the Company before non-cash gains and losses on derivatives, income taxes, non-cash equity compensation expense, interest expense, and losses on extinguishment of debt, the result of which is divided by average capital employed for the year, with capital employed representing the sum of total debt and total shareholders’ equity attributable to the Company. Relative total shareholder return represents the percentage change in the Company’s stock price as compared to the companies listed in the table below. For 2018 we compared the 60 day moving average price at 2018 year-end to the 60 day moving average price at 2017 year-end. The table below lists the companies other than the Company used to determine relative total shareholder return for the bonus for 2018 paid in February 2019:

Individual awards for participants in the CLR Bonus Plan in connection with the bonuses for 2018 which were paid in February 2019, were calculated utilizing the following formula:

Base Earnings x Target Bonus x Company Multiplier x Individual Multiplier = Initial Bonus Amount

For purposes of this formula, “base earnings” refers to the actual amount paid in respect of salary during 2018. Except for Mr. Hamm, the individual multiplier for the 2018 bonuses was based on the Compensation Committee’s review of the 2018 Survey Group and the subjective evaluation of each of the NEO’s supervisor or supervisors. Mr. Hamm’s individual multiplier was determined based on the subjective evaluation of the Compensation Committee. The subjective evaluation of each NEO was primarily based on an evaluation of each NEO’s contributions to the Company’s performance with respect to the 2018 Performance Factors relevant to that NEO. For 2018, after calculating the Company multiplier based on the measures and methodology described above, individual differences resulted from the subjective evaluation of performance that determined each NEO’s individual multiplier. In making its evaluation, where applicable, the Compensation Committee places significant weight on input provided by our Chief Executive Officer and our President.

Once the NEOs’ Initial Bonus Amounts were calculated, they were presented by Mr. Stark to the Compensation Committee for review, and in the case of Mr. Hamm also presented to the Board, both of which had the discretion to increase or decrease individual Initial Bonus Amounts and determine final awards. Using the factors described previously, the Compensation Committee determined the final awards were appropriate and approved the bonuses for 2018 as presented by management.

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The following table shows target annual cash bonus amounts as a percentage of base earnings for each of the NEOs in connection with the bonuses for 2018 which were paid in February 2019 under the CLR Bonus Plan:

Annual cash bonuses for the NEOs are determined concurrently with the year-end audited financial statements and reserve report. We have adopted a clawback policy that is applicable to the bonus for 2018 paid in February 2019 and to future awards under the CLR Cash Bonus Plan. For more information regarding the clawback policy, please see “CLR Clawback Policy” on page 32 below.

Mr. Gould forfeited all of the shares shown in the table above as a result of his departure from the Company. The awards for each of the NEOs other than Mr. Hamm were approved by the Compensation Committee. Mr. Hamm’s award was approved by the Compensation Committee and by the full Board based on the recommendation of the Compensation Committee, with Mr. Hamm abstaining.

The long-term incentive award for each NEO is determined at the discretion of the Compensation Committee using the approach described above under “Executive Summary—Compensation Philosophy and Components.” Differences in long-term incentive awards are based on the Compensation Committee’s subjective evaluation of the expected relative individual contribution to the achievement of our long-term financial and operating results. The value of unvested equity awards held by an individual is expected to be a factor considered in future awards.

The vesting provisions of the awards encourage our officers to remain in our employ in order to realize these forms of compensation. Our current equity programs consist of restricted stock awards, which we believe are stronger motivational tools for employees when compared to alternatives such as stock options. Restricted shares provide some value to an employee during periods of stock market volatility, while stock options may have limited perceived value and may do little to retain and motivate employees when the current value of our stock is less than the option price. Although our 2013 Plan allows for various equity instruments, we intend to make future grants primarily in the form of restricted stock.

The restricted stock awards provide for immediate vesting upon a change in control, as defined by the 2013 Plan. We would likely need the assistance of several key employees to successfully conclude a transaction resulting in a change in control. We believe immediately vesting the awards may serve to reduce concerns, other than continued employment, such employees may have with respect to any potential change in control transaction and may motivate them to complete the transaction.

We have a policy which prohibits our directors and certain employees, including our executive officers, from holding our securities in a margin account or pledging our securities as collateral, unless permission is received from our General Counsel in writing. The same

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policy prohibits these individuals from engaging in transactions which may hedge the value of our securities, including, without limitation, buying or selling puts and calls for, or engaging in short sales of, our securities. Employees, including our executive officers, are selected to be subject to these policies based on their access to material information about our Company as part of their day-to-day responsibilities. The purpose of the prohibition against hedging is to align the interests of our directors and the employees described above with the performance and prospects of the Company.

The Company has a Common Stock ownership requirement for our executive officers. Each such officer is required to own shares of our Common Stock at least equal to a specified multiple of such officer’s base salary. The table below lists base salary multiples applicable to the different positions within this group:

Until the stock ownership guideline is achieved, each such officer is required to retain 100% of the “net shares” received as a result of restricted shares granted under our 2013 Plan. “Net shares” are the number of shares that remain after shares are sold or withheld to pay withholding taxes. The calculation is determined as of December 31 each year based upon the average closing price of the Common Stock for the year compared to the officer’s base salary as of such date. Shares owned directly by, or held in trust for, the officer or his or her immediate family members residing in the same household and unvested restricted shares are included in the calculation.

The Compensation Committee reviews the compliance of each executive officer with the stock ownership guidelines each year and reduces or eliminates future restricted stock grants under the 2013 Plan for any executive officer not in compliance with the stock ownership guidelines. The Compensation Committee reviewed the NEOs’ and other applicable officers’ stock ownership as of December 31, 2018 and determined each NEO and other applicable officers were in compliance with the guidelines.

The purpose of the DCP is to (i) give DCP participants, including the NEOs, an additional tool to use in planning their savings and for retirement; and (ii) provide a vehicle to allow employee DCP participants, all of whom are limited in their participation in the Company’s 401(k) (as defined below) due to limits imposed under federal tax rules (“Limits”), to receive similar benefits in connection with Company matching contributions as employees whose ability to receive Company matching contributions is not impacted by the Limits. The DCP permits the Company to make discretionary matching and other contributions to a participant’s account, although the Company did not make any such contributions to the NEOs’ accounts within the DCP during the 2018 year. For a description of the material features of the DCP see the narrative “Description of Deferred Compensation Plan” on pages 37 and 38 below.

In 2018, we allowed Mr. Hamm to use the corporate aircraft for personal trips. The value of such trips is calculated according to IRS guidelines and reported as taxable income to him. On occasion the spouses and guests of NEOs may accompany them on business-related trips. Aircraft usage and travel by spouses and guests are valued for disclosure in our proxy statement based on the aggregate incremental cost to us.

We have a defined contribution retirement plan (“401(k)”) covering all full-time employees. Our contributions to the plan are discretionary and based on a percentage of eligible compensation. On July 1, 2014, the Company elected to increase the contribution

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level in the plan up to a maximum of 10% of a covered employee’s eligible compensation effective January 1, 2015, depending on the employee’s level of contribution into the employee’s account. This change was made in order to enhance the competitiveness of the compensation associated with the 401(k). Due to the commodity price environment in 2016, the 10% contribution level was reduced to 2% effective March 1, 2016. Beginning December 1, 2016, the Company reinstated the 10% contribution level based on dollar for dollar matching, subject to IRS limits.

All full-time employees may participate in our health and welfare benefit programs, including medical, dental, vision care, life insurance and disability insurance. We provide all full-time employees with life insurance coverage of the lesser of two times base salary or $1,000,000 and allow them to purchase supplemental coverage. We do not sponsor any qualified or non-qualified defined benefit plans.

In order to be subject to recovery, an award must have been based in whole or in part on measures that are impacted by the restatement. The amount to be recovered is any excess value received by the executive officer as a result of the measures impacted by the restatement. Any matching awards under the Company’s DCP that are impacted by the measures subject to restatement are also subject to recovery. The Compensation Committee has the discretion to determine how recovery is to be achieved, which may include, among other things, seeking reimbursement, cancelling other outstanding equity awards or reducing future compensation. Simple interest will be applied to any recovery amount.

Since all current outstanding equity awards are restricted stock awards subject to time-based vesting, and we have not made matching awards under the DCP since 2015, the only compensation that may be subject to the policy as of the date of this proxy statement are awards made under the CLR Bonus Plan. In order to receive a CLR Bonus Plan award that will be subject to the clawback policy, each executive officer must execute an agreement agreeing to abide by the terms of the clawback policy. Each executive officer executed such an agreement in connection with the bonus for 2018, paid in February 2019.

The clawback policy is administered by the Compensation Committee. The Compensation Committee has discretion to waive or limit the amount to be recovered under the clawback policy if it determines such action is justified in its business judgment. Among others, circumstances that may be considered by the Compensation Committee in exercising discretion to waive or limit recovery are the passage of time, whether the cost of recovery outweighs the benefit to the Company, and whether the recovery will remedy the wrongful conduct or aid in preventing its recurrence.

Impact of Accounting and Tax Treatment

We believe it is important to have flexibility in designing the compensation program in a manner to achieve the objectives described above under “Compensation Objectives.” Therefore, while we consider the accounting and tax treatment of certain forms of compensation in the design of our compensation program, the accounting and tax treatment is not a determinative factor.

Prior to 2018, under Section 162(m) of the Internal Revenue Code, a publicly-held company could deduct for federal tax purposes no more than $1,000,000 of annual compensation paid to its principal executive officer and each of its three other most highly-paid officers other than the principal financial officer, unless the compensation was “performance-based compensation.” These Section 162(m) restrictions applied to salary, bonuses, and other compensation not directly tied to performance conditions. Our compensation program prior to 2018 did not meet the requirements for tax deductibility of annual compensation in excess of $1,000,000 because the relevant compensation was not payable solely on account of the attainment of one or more performance goals. Beginning with 2018, Section 162(m) of the Code generally does not contain an exception for “performance-based compensation.” Therefore, we do not expect the restrictions of Section 162(m) of the Code to play any role in our compensation decisions going forward.

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Our insider trading policy provides that certain of our employees and all directors may not purchase or sell puts or calls to sell or buy our securities or engage in short sales with respect to our securities. Certain employees and all directors are also prohibited from holding our securities in a margin account or pledging our securities as collateral for a loan, unless permission is received from our General Counsel in writing. The purchase or sale of stock by our officers, directors and certain employees may only be made during a window of time described in our policy and after approval by our General Counsel.

In accordance with its written charter adopted by the Board, the Compensation Committee of the Board is responsible for overseeing awards to employees of stock or other equity compensation and reviewing and approving the individual elements of the total compensation of the Chief Executive Officer, the other NEOs and other senior executive officers. The Compensation Committee is also obligated to communicate to shareholders information regarding the factors and criteria on which the Chief Executive Officer’s compensation was based, including the relationship of the Company’s performance to the Chief Executive Officer’s compensation, and the specific relationship of corporate performance to executive compensation overall.

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) above with management. Based on this review and discussion, the Compensation Committee recommended to the Board that this CD&A be included in this Proxy Statement.

33

The following table sets forth the compensation of our Principal Executive Officer, Principal Financial Officer, and the three other most highly compensated executive officers during 2018. We refer to these five individuals collectively as the “NEOs” for 2018. Mr. Gould resigned from his position as our Senior Vice President, Production and Resource Development on March 6, 2019, effective March 20, 2019. He is included in the table as an NEO since he was employed by the Company at the end of 2018. Compensation is shown for years 2016, 2017 and 2018, as applicable.

34

The following table reflects information concerning awards of restricted stock granted to our NEOs during the fiscal year ending December 31, 2018 under the Company’s 2013 Plan:

The following table shows the percentage of base salary and bonus that each NEO received or earned with respect to 2018 as compared to that NEO’s total compensation for 2018:

35

The following table reflects unvested restricted stock held by our NEOs as of December 31, 2018:

The following table reflects information concerning shares of restricted stock held by NEOs that vested during 2018:

36

The following table sets forth our NEOs’ information regarding the DCP, including, with respect to each officer: (i) the aggregate contributions made by the officer; (ii) the employer contribution; (iii) the aggregate interest or other earnings accrued; (iv) aggregate withdrawals and distributions; and (v) the total balance of the officer’s account.

On September 20, 2013, the Board, based upon the recommendation of the Compensation Committee, established the DCP.

The purpose of the DCP is to (i) give DCP participants and non-employee directors an additional tool to use in their personal financial planning; and (ii) provide a vehicle to allow employee DCP participants, all of whom are limited in their participation in the Company’s 401(k) plan due to the Limits, to receive similar benefits in connection with Company matching contributions as employees whose ability to receive Company matching contributions is not impacted by the Limits. The DCP permits the Company to make discretionary matching and other contributions to a participant’s account and the matching and discretionary contributions approved in connection with the DCP are intended to facilitate the purpose described in (ii) above.

The DCP is not intended to constitute a “qualified plan” subject to the limitations of Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), nor is it a “funded plan” for purposes of the Code. Benefits under the DCP constitute an unfunded general obligation of the Company. The DCP is designed to provide directors and select management or highly compensated employees of the Company the opportunity to defer the payment of all or a portion of their base pay and cash incentive awards (to the extent a participant is eligible to receive such awards).

Each year the DCP permits participants to elect to defer: (i) up to 100% of base pay (cash fees in the case of directors) for a calendar year and (ii) up to 100% of any cash incentive award received by the employee participant for a performance year. DCP participants are 100% vested in any amounts they deferred pursuant to the alternatives described in the prior sentence. The DCP permits discretionary contributions by the Company, which are subject to a vesting schedule, as described below, at the discretion of the DCP Administrator.

As permitted by the DCP, matching contributions have been approved enabling employee participants to receive matching under the DCP for up to 10% of their total cash compensation, including salary and bonus deferrals. The approved match was intended to align with the amount employee participants would have received under the 401(k) plan, but for the Limits and is given subject to terms and conditions applicable to matching contributions under the 401(k) plan. As a result of the continued volatile commodity price environment, the Company suspended the match described above for 2018, and the suspension was applicable to any bonus paid in February 2019 for 2018 under CLR’s Cash Bonus Plan. All matching has been suspended since 2016.

37

Distribution of DCP amounts deferred in connection with 2014 will occur upon a participant’s separation from service with the Company. The Company requires a six month delay in the payment of DCP benefits if the participant is a “specified employee” pursuant to Section 409A of the Code at the time of his or her separation from service with the Company, and an earlier payment would result in the imposition of an excise tax on the participant if the amounts were received at the time of his or her separation (the “Specified Employee Delay”). In addition, in connection with amounts deferred in respect of 2014, distribution of DCP accounts and vesting of any Company contributions will result from any of the following events: (i) Change of Control (as defined in the DCP); (ii) a participant’s death or Disability (as defined in the DCP); (iii) a participant’s Normal Retirement (as defined in the DCP); and (iv) a participant’s Involuntary Termination (as defined in the DCP).

Distribution of DCP amounts deferred after 2014 will occur, subject to limited exceptions, based on the election of the participant to receive a distribution upon a fixed date chosen by the DCP participant, the participant’s Termination of Employment (as defined in the DCP), or a Change of Control. In addition, distribution of DCP amounts deferred after 2014 will occur in the event of the participant’s death or Disability. In connection with these distribution events, participants can choose, except in the case of death or Disability, to receive distributions in a lump sum or installments. In the case of death or Disability, the distribution will be made in a lump sum. Participants also have the ability to elect a lump sum distribution if a Change of Control or Involuntary Termination occurs after a participant has started to receive distributions after a fixed date. Distributions described above are also subject to the Specified Employee Delay. Finally, vesting restrictions on any amounts deferred after 2014 will lapse in connection with any of the following events: (i) Change of Control; (ii) participant’s death or Disability; and (iii) a participant’s achievement of Normal Retirement Age (as defined in the DCP).

Earnings reflect the returns, including losses, produced by the investments selected by the applicable named executive officer. The investment options available to the NEOs are a sub-set of the investment options available under the Company’s 401K Plan. As of December 31, 2018, investment options consisted of the following (returns for 2018 noted in parentheses): Fidelity^® High Income (-2.44%), Oakmark Equity & Income I (-8.33%), TRP Retirement 2005 (-3.18%), TRP Retirement 2010 (-3.51%), TRP Retirement 2015 (-4.08%), TRP Retirement 2020 (-4.82%), TRP Retirement 2025 (-5.55%), TRP Retirement 2030 (-6.13%), TRP Retirement 2035 (-6.69%), TRP Retirement 2040 (-7.04%), TRP Retirement 2045 (-7.26%), TRP Retirement 2050 (-7.36%), TRP Retirement 2055 (-7.36%), TRP Retirement 2060 (-7.4%), Fidelity^® Contrafund^® K (-2.07%), Fidelity Spartan^® 500 Index Advtg^® (-4.4%), Fidelity^® Low-Priced Stock (-10.68%), MFS Mid-Cap Value Equity I (-11.31%), Fidelity Spartan^® Extnd Mkt Idx Advtg (-9.36%), Driehaus Emrg Mkts (-16.27%), Eagle Mid CP Grth R6 (-6.01%), Metwest Total Return Bond (0.29%), Fidelity Spartan^® Intl Idx Advtg (-13.52%), American Beacon Small Cp Val Inst (-15.63%), American Funds EuroPacific Growth Fund (-14.91%), JH Disciplined Value Fund R6 (-9.47%), and Wells Fargo SM Co Growth IS (-3.63%). The Company does not guarantee a level of investment return.

We do not maintain employment, severance or change in control agreements with our NEOs outside of the potential acceleration provisions described below with respect to our equity awards. We discussed our rationale for providing change in control equity vesting above under “Compensation Discussion and Analysis.”

Vesting of Restricted Stock on Change in Control. All of our employees’ and directors’ unvested shares of restricted stock will vest if a change in control occurs as defined in their respective agreements. These agreements are subject to the provisions of the 2013 Plan. The 2013 Plan contains customary change in control provisions.

Listed in the following table is the value of unvested shares of restricted stock held by our NEOs as of December 31, 2018, which would fully vest and be immediately available in the event of a change in control under the 2013 Plan. The table assumes a change in control occurred on December 31, 2018 and the per-share value is $40.19, the closing price of our Common Stock as of December 31, 2018:

38

Distributions in Connection with DCP. Under the terms of our DCP, distributions of deferred compensation and accelerated vesting of Company contributions may occur in connection with change of control or a participant’s termination. A description of such distributions and accelerated vesting, as well as the circumstances triggering these events with respect to Messrs. Hamm, Stark, Hart, Gould and Bent appear above on pages 37 and 38 in the description of our DCP appearing under the heading “Description of Deferred Compensation Plan.”

Gary Gould Departure. Mr. Gould did not receive any compensation or acceleration of unvested shares in connection with his departure from the Company. He will receive distributions under the DCP in accordance with its standard terms.

Our officers, directors, and certain other employees have entered into customary indemnification agreements with us, pursuant to which we have agreed to indemnify our officers and directors to the fullest extent permitted by law.

We believe our executive compensation program is appropriately structured and not reasonably likely to result in risks that could have a material adverse effect on us. We believe our approach of subjectively evaluating performance results of each executive 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. We believe we have allocated our compensation among base salary and short and long-term compensation opportunities in such a way as to not encourage excessive risk-taking. Further, one of the primary factors we take into consideration in setting compensation is the performance of the Company as a whole. This is based on our belief that applying Company-wide metrics encourages decision-making that is in the best long-term interests of the Company and our shareholders as a whole. Finally, the time-based vesting over a multi-year period for our long-term incentive awards ensures our employees’ interests align with those of our shareholders for the long-term performance of our Company.

The 2018 compensation disclosure ratio of the median total compensation of all Company employees to the annual total compensation of Mr. Hamm, our Chief Executive Officer, who is our principal executive officer, is as follows:

2018 Median employee total annual compensation: $129,849

2018 Chief Executive Officer total annual compensation: $13,332,412

2018 Ratio of total annual compensation of Chief Executive Officer to median employee: 103:1

With respect to the ratio calculation, we identified the median employee by examining the 2018 compensation reported on Form W-2 for all individuals, excluding our Chief Executive Officer, who were employed by us (whether on a full-time, part time, seasonal or temporary basis) on December 31, 2018, the last day of our previous fiscal year. For such employees we did not make any annualizations, assumptions, adjustments (including cost-of-living adjustments) or estimates with respect to the compensation reflected on the Form W-2s.

After identifying the median employee, we calculated the total annual compensation for such employee using the same methodology we use for our named executive officers as set forth in the Summary Compensation Table appearing on page 34 of this proxy statement.

Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the ratio reported above should not be used as a basis for comparison between companies.

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Security Ownership of Certain

Beneficial Owners and Management

The following table sets forth certain information concerning the beneficial ownership of our shares of Common Stock, as of March 21, 2019, by each person (other than our directors and executive officers) known by us to be the beneficial owner of more than 5% of the issued and outstanding Common Stock.

The following table sets forth certain information concerning the beneficial ownership of our shares of Common Stock as of March 21, 2019 by (a) each of our directors and director nominees, (b) each of the executive officers and Mr. Gould, since he is an NEO, and (c) all of our directors, director nominees and executive officers and Mr. Gould as a group. Each of the aforementioned persons has sole voting and dispositive power with respect to the shares listed in the table, except as otherwise indicated below.