Company: MGY
Filing Date: 2025-03-20
Form Type: DEF 14A
Source: 0001558370-25-003377
Chunk: 46

Company: Magnolia Oil & Gas Corp
Filing Date: 2025-03-20
Form: DEF 14A
Chunk 46
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 of this metric aligns with Magnolia’s strategy. For the 2023 bonus program, the two quantitative metrics of Operating Margin and Free Cash Flow Percentage were similarly

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| Magnolia Oil & Gas | 39 | 2025 Proxy Statement |

Compensation Discussion and Analysis

weighted, with the Operating Margin component comprising 40 percent of the total award and the Free Cash Flow Percentage component comprising 35 percent of the total award. The Compensation Committee continued to believe that parity between the 2024 quantitative metrics was appropriate such that Operating Margin, Free Cash Flow Percentage, and Net Debt to EBITDAX each comprise 25 percent of the total award opportunity in the 2024 Bonus Program. The Compensation Committee monitors our performance against the quantitative objectives and discusses progress against those objectives at each committee meeting. For each of the three quantitative components, the 2024 Bonus Program included a range of performance outcomes between the specified minimum and maximum performance levels, which are generally based on the Company’s approved budget and operating plan for the year, along with a corresponding payout range. The specified performance levels and the corresponding payout range for each quantitative component for 2024 is set forth in the table below entitled “Performance Outcomes.” The minimum specified performance level for each quantitative component for 2024 reflects the level of performance the Compensation Committee believes must be met before any payout for each such metric is warranted. No amount is earned with respect to a quantitative component of the 2024 Bonus Program if the minimum performance level for that component is not obtained, and a minimum payment equal to a specified percentage of the potential payout amount attributable to each quantitative component for 2024 is earned if the performance actually attained meets the respective minimum specified performance level. The maximum specified performance level for each quantitative component for 2024 challenges management to achieve exceptional performance. If the maximum specified outcome for a quantitative component is achieved or exceeded, then the maximum amount attributable to that component will be paid. For actual performance outcomes falling within the performance level range for each of the quantitative components, the Compensation Committee determines the actual amount earned:

| ◾ | For the Operating Margin and Net Debt to EBITDAX components, using linear interpolation between the minimum and maximum potential payout amounts. |

| ◾ | For the Free Cash Flow Percentage component, using linear interpolation within specified payout brackets, which are described in the “Performance Outcomes” table below. These payout brackets are non-linear by design, resulting in a greater rate of penalty the further away results