Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Pursuant to the Plan, as of the Effective
Date, the following directors ceased to serve on the Company’s board of directors: James A. Watt, Kevin A. Neveu and Gregory
P. Raih.
Pursuant to the Plan, Reorganized Bonanza
Creek’s new board of directors, consisting of the following persons, was appointed as of the Effective Date:
1. Paul Keglevic
Paul Keglevic is a senior executive and trusted business advisor
with a strong track record of performance serving the utility industry and two Big 5 accounting firms, with deep expertise in finance
and accounting, restructuring, risk management, shared services, regulatory testimony, and process improvement. Mr. Keglevic has
been at Energy Future Holdings Corp. since 2008, serving as Chief Executive Officer of TCEH since October 2016, Chief Restructuring
Officer since December 2013, Executive Vice President, Chief Financial Officer from 2008 to September 2016, President of EFH Corporate
Services from 2010 to 2016 and Chief Risk Officer from 2008 to 2016.
Prior to Energy Future Holdings Corp., Mr. Keglevic worked for
over 25 years at Arthur Andersen and for six years at PricewaterhouseCoopers (PWC). Mr. Keglevic serves on the Board of Directors
of Energy Future Intermediate Holdings, EFIH Finance Inc., Stellus Capital Management LLC and the Dallas Chamber of Commerce (not-for-profit).
Mr. Keglevic received a Bachelor’s Degree in Accounting from Northern Illinois University.
2. Thomas B. Tyree,
Jr.
Thomas B. Tyree, Jr. served as President, Chief Financial Officer
and Member of the Board of Managers of Vantage Energy from 2006 to 2016. Prior to Vantage Energy, Mr. Tyree served as Chief Financial
Officer of Bill Barrett Corporation, a Managing Director in the Investment Banking Division at Goldman, Sachs & Co. and an
Associate in the Corporate Finance division at Bankers Trust Company. Mr. Tyree received his M.B.A. from The Wharton School at
the University of Pennsylvania and his B.A. at Colgate University.
3. Jack E. Vaughn
Jack E. Vaughn is the Chairman and Chief Executive Officer of
Peak Exploration and Production, LLC, where he is responsible for executive management of all operational activity, including drilling,
completion, and facility construction in all operating areas, as well as all gas and crude oil transportation and marketing, regulatory
and environmental compliance activities. Mr. Vaughn serves on the Board of Directors of Saddle Butte Pipeline II, LLC and was the
co-founder and a member of the Board of Directors of Momentum Midstream, LLC from 2007 to 2011. In addition, Mr. Vaughn has held
several senior management positions at energy companies in the United States, including Peak Energy Resources, Inc., EnerVest Management
Partners, LP and Emerald Gas Operating Company. Mr. Vaughn received his B.S. – Petroleum Engineering from the University
of Texas at Austin.
4. Scott D. Vogel
Scott D. Vogel was a Managing Director at Davidson Kempner Capital
Management investing in distressed debt securities from 2002 to 2016. Previously, Mr. Vogel worked at MFP Investors, investing
in special situations and turnaround opportunities. Prior to MFP Investors, he was an investment banker at Chase Securities. Mr.
Vogel
received his M.B.A. from The Wharton School at the University
of Pennsylvania and his B.S.B.A. from Washington University.
Mr. Vogel serves on the Board of Directors of Key Energy Services,
Arch Coal and other companies, and previously on numerous Board of Directors and ad hoc creditor and equity committees throughout
his career. Mr. Vogel is a member of the Olin Alumni Board of Washington University, a member of the Advisory Board of Grameen
America, and a former member of New Leadership Council of Make-A-Wish Foundation of Metro New York.
5. Jeffrey E. Wojahn
Mr. Wojahn served as Executive Vice President of EnCana Corporation
from 2003 to 2013, and was President of Encana Oil & Gas (USA) Inc. from 2006 to 2013. Beginning in 1985, Mr. Wojahn held senior
management and operational positions in Canada and the United States and has extensive experience in unconventional resource play
development. He currently serves as a Strategic Advisory Board member for Morgan Stanley Energy Partners.
6. Brian Steck
Brian Steck is a Partner, Senior Analyst at Mangrove Partners.
Mr. Steck joined Mangrove Partners in June 2011. Through early 2011, Mr. Steck managed The Laurel Capital Group, LLC, the general
partner of a hedge fund he founded in 2009. From 2006 until 2008, Mr. Steck was Head of US Equities at Tisbury Capital where he
built and managed a team focused on event- and fundamentally-driven investment opportunities. From 2000 until 2005, Mr. Steck was
a partner at K Capital where he focused on European and U.S. opportunities that included special situations, merger arbitrage,
deep value and shareholder activism. Prior to K Capital, Mr. Steck spent 10 years at UBS and its predecessors Swiss Bank Corporation
and O’Connor & Associates, where he focused on equity derivative trading and risk management, built equity derivative
and event-driven client businesses and was Global Co-Head of Equity Hedge Fund Coverage. Mr. Steck received a Bachelor’s
of Science, with highest honors, from University of Illinois at Urbana Champaign.
7. Richard Carty
Mr. Carty was named President and Chief Executive Officer in
November, 2014. He has over 24 years of experience in global capital markets and finance with investment management mandates including
energy, commodities, and engineering. He served as Chairman of the Board of Directors of Bonanza Creek since December 2010, when
he led a major recapitalization of Bonanza Creek on behalf of West Face Capital (USA) Corp, an affiliate of West Face Capital,
where he served as President from 2009 until 2013. Prior to that period, Mr. Carty was Managing Director of Morgan Stanley Principal
Strategies where he was responsible for investing the bank’s capital in proprietary investment mandates in public corporate
securities and private securities. Mr. Carty led investment teams that ran Morgan Stanley’s value arbitrage strategies, special
situations investments, strategic private investments, and global quantitative strategies. Prior to Mr. Carty's 14 years at Morgan
Stanley, he was a partner at Gordon Capital Corp, a Toronto-based investment and merchant bank, where he worked for five years.
Committees of the Directors
The standing committees of the new board
of directors will consist of an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and
an Environmental, Health, Safety and Regulatory Compliance and Reserves Committee.
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The Board has appointed Messrs. Keglevic, Tyree and Vogel as members of the Audit Committee. Mr. Keglevic has been appointed
Chairman of the Audit Committee;
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The Board has appointed Messrs. Vogel, Tyree and Wojahn as members of the Compensation Committee. Mr. Vogel has been appointed
Chairman of the Compensation Committee;
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The Board has appointed Messrs. Steck, Keglevic and Vaughn as members of the Nominating and Corporate Governance Committee.
Mr. Steck has been appointed Chairman of the Nominating and Corporate Governance Committee;
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The Board has appointed Messrs. Wojahn, Carty and Steck as members of the Environmental, Health, Safety and Regulatory Compliance
and Reserves Committee. Mr. Wojahn has been appointed Chairman of the Environmental, Health, Safety and Regulatory Compliance and
Reserves Committee.
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Indemnification of Directors and Executive Officers
As of the Effective Date, Reorganized Bonanza
Creek entered into indemnification agreements with each of its directors and executive officers. The indemnification agreements
require Reorganized Bonanza Creek to (i) indemnify these individuals to the fullest extent permitted under Delaware law against
liabilities that may arise by reason of their service to Reorganized Bonanza Creek, and (ii) advance expenses reasonably incurred
as a result of any proceeding against them as to which they could be indemnified. Reorganized Bonanza Creek may enter into indemnification
agreements with any future directors or executive officers.
Each indemnification agreement is in substantially
the form included herein as Exhibit 10.7 to this Report. The description of the indemnification agreements is qualified in its
entirety by reference to the full text of the form of indemnification agreement, which is incorporated by reference herein.
2017 Long Term Incentive Plan
On the Effective Date, pursuant to the
operation of the Plan, the Bonanza Creek Energy, Inc. 2017 Long Term Incentive Plan (the “LTIP”) became effective.
Our employees and those of our subsidiaries,
members of our board who are not employees, and individuals who provide consulting, advisory or other similar services to us or
our subsidiaries are eligible to receive awards under the LTIP.
The LTIP permits the grant of non-qualified
stock options, incentive stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units, dividend
equivalent rights, cash awards and other stock-based awards, any of which may be further designated as performance awards
The LTIP will be administered by the board
or a committee of the board pursuant to its terms and all applicable state, federal or other rules or laws, provided that such
committee will consist of “outside directors” with respect to awards intended to qualify as “performance-based
compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended.
The maximum number of New Common Stock
available for issuance under the LTIP is 2,467,430. If any award granted under the LTIP is surrendered, forfeited, or otherwise
lapses or expires, the shares subject to such award will again be available for issuance under the LTIP.
In the event of certain changes to our
capitalization, such as a stock split, stock combination, stock dividend, extraordinary cash dividend, exchange of shares, or other
recapitalization, merger or otherwise, that result in an increase or decrease in the number of outstanding shares of common stock,
appropriate adjustments will be made by the board as to the number and kind of shares subject to an award granted under the LTIP
and the number of shares available for issuance under the LTIP.
In the event of a “change in control”
(as defined in the LTIP), each outstanding award will be deemed to have vested and will become exercisable to the extent so provided
in the applicable award agreement; provided that the board may elect to accelerate the vesting of, or cancel, or take any other
action with respect to any outstanding award as it deems appropriate in its sole discretion. However, if the board elects to cancel
any outstanding stock-based award, the holder of such award will receive, in consideration of such cancellation, an amount of cash
or marketable securities with a value that is not less than such award’s “intrinsic value” (as defined in the
LTIP).
This summary of the LTIP is qualified in
its entirety by reference to the full text of the LTIP, which is attached hereto as Exhibit 10.3 and incorporated by reference
herein.
Emergence Awards
On the Effective Date, Reorganized Bonanza
Creek’s new board of directors approved grants of awards (the “Emergence Awards”) of restricted stock units (the
“RSUs”) and non-qualified stock options (the “Options”) with
respect to New Common Stock to Reorganized Bonanza Creek’s
employees under the LTIP. The Emergence Awards are scheduled to vest annually in three equal installments on each of the first
three anniversaries of the Effective Date. The Options have a per share exercise price of $34.36. Reorganized Bonanza Creek’s
named executive officers were granted Emergence Awards in the following amounts:
Named Executive Officer
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Options
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RSUs
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Richard J. Carty
President and Chief Executive Officer
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137,814
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137,814
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Scott Fenoglio
Senior Vice President, Finance
and Planning
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24,382
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24,382
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Wade E. Jaques
Vice President and Chief
Accounting Officer
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7,209
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7,209
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Ramon “Curt” Moore
Senior Vice President, Land
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24,382
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24,382
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Each
of the named executive officers participates in Reorganized Bonanza Creek’s Third Amended and Restated Change in Control
Severance Plan (the “CIC Severance Plan”), pursuant to which the vesting of the executive’s Emergence Awards
will fully accelerate on termination of his employment by Reorganized Bonanza Creek without “Cause,” by him for “Good
Reason,” or due to his death or “Disability” (as such terms are defined in the CIC Severance Plan).
An aggregate of 69,975 shares available
for issuance under the LTIP are reserved for grants to a Chief Operating Officer, with 50% of such shares to be granted in the
form of Options, and the remaining 50% of such shares to be granted in the form of RSUs. If at the first anniversary of the Effective
Date Reorganized Bonanza Creek has not hired a Chief Operating Officer, new grants representing a value (as determined on such
first anniversary) equal to the value of the reserve for the Chief Operating Officer (as determined on the Effective Date) will
be made to all or any portion of the employees of Reorganized Bonanza Creek as determined by the Compensation Committee of the
board of directors, in its discretion. The new grants will be in the form of Options and/or RSUs, in each case with one-half vesting
at each of the second and third anniversaries of the Effective Date.
The foregoing descriptions of the Emergence
Awards are qualified in their entirety by reference to the full text of the Form of Restricted Stock Unit Agreement and the Form
of Non-Qualified Stock Option Agreement, which are filed as Exhibits 10.4 and 10.5, respectively, hereto, and in each case are
incorporated by reference herein.
Third Amended and Restated Change in Control and Severance
Plan
On the Effective Date, the Company’s
pre-emergence board of directors approved the CIC Severance Plan, which in accordance with the Plan amended the Company’s
Second Amended and Restated Change in Control and Severance Plan to provide that:
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the restructuring transactions effected in connection with the Plan and any associated organizational changes that occurred
prior to the Effective Date will not constitute a “Change in Control” (as defined in the CIC Severance Plan) or serve
as a basis to trigger benefits under the CIC Severance Plan; and
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the CIC Severance Plan may not be amended or modified in any manner that would impair vesting (including accelerated vesting)
of the Emergence Grants.
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This summary of the CIC Severance Plan
is qualified in its entirety by reference to the full text of the CIC Severance Plan, which is attached hereto as Exhibit 10.6
and incorporated by reference herein.
Item 9.01 Exhibits.
(d) Exhibits
Exhibit
No.
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Description
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2.1
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Order Confirming Debtors’ Third Amended Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code on April 7, 2017 (incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K filed on April 7, 2017).
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Exhibit
No.
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Description
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2.2
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Debtors’ Third Amended Joint Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (incorporated by reference to Exhibit 2.1 of the Company’s Form 8-K filed on April 7, 2017).
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4.1*
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Form of Warrant Certificate (included in Exhibit 10.2).
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10.1*
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Amended and Restated Credit Agreement dated as of April 28, 2017, among Bonanza Creek Energy, Inc., as borrower, the lenders party thereto and KeyBank National Association, as administrative agent and as issuing lender.
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10.2*
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Warrant Agreement dated as of April 28, 2017, among Bonanza Creek Energy, Inc. and Broadridge Investor Communication Solutions, Inc. as warrant agent.
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10.3*
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Bonanza Creek Energy, Inc. 2017 Long Term Incentive Plan.
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10.4*
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Form of Restricted Stock Unit Agreement under the Bonanza
Creek Energy, Inc. 2017 Long Term Incentive Plan.
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10.5*
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Form of Non-Qualified Stock Option Agreement under
the Bonanza Creek Energy, Inc. 2017 Long Term Incentive Plan.
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10.6*
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Bonanza Creek Energy, Inc. Third Amended and Restated
Executive Change in Control and Severance Plan.
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10.7*
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Form of Indemnification Agreement between Bonanza Creek Energy, Inc. and the directors and executive officers of Bonanza Creek Energy, Inc.
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