Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Resignation of Chief Executive Officer, Chief Operating Officer and Director
On April 9, 2021, Mr. Cary M. Bounds and VAALCO Energy, Inc. (the “Company”), entered into a Separation and Mutual Release Agreement (the “Separation Agreement”). Pursuant to the Separation Agreement, Mr. Bounds will resign from his positions as Chief Executive Officer, Chief Operating Officer and a member of the Company’s Board of Directors (the “Board”) (and any committees thereof) on April 18, 2021. Mr. Bounds will continue to be employed by the Company to assist with the transition of his duties until 5 p.m. on April 30, 2021 (the “Separation Date”). Pursuant to the Separation Agreement, Mr. Bounds will be entitled to receive (i) a cash severance payment equal to $1,164,500, less applicable withholdings and taxes, payable over a six-month period, (ii) continued group health plan coverage for Mr. Bounds, his eligible spouse and other dependents for a period of up to one year following the Separation Date, provided that Mr. Bounds, his spouse and other dependents elect to maintain group health plan coverage for such period, and (iii) $95,500 for attorneys’ fees. In addition, Mr. Bounds will be paid his base salary through the Separation Date. The Separation Agreement provides that the receipt of any benefits pursuant to the Separation Agreement is contingent upon the execution of a waiver and mutual release of claims on the Separation Date. Mr. Bounds’ departure is not related to any issues regarding disagreements with management or the Board.
The Separation Agreement also provides for certain customary covenants regarding confidentiality and non-disparagement. Upon effectiveness of the Separation Agreement, Mr. Bounds’ existing employment agreement will automatically terminate; provided, however, that certain surviving customary confidentiality provisions and restrictive covenants will remain in full force and effect.
The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Appointment of New Chief Executive Officer
On April 9, 2021, the Board appointed Mr. George Maxwell as Chief Executive Officer of the Company, effective April 19, 2021. Concurrent with the appointment of Mr. Maxwell, the Company and Mr. Maxwell entered into an employment agreement effective as of April 19, 2021 (the “Employment Agreement”), pursuant to which Mr. Maxwell will be entitled to receive an annual base salary of $450,000. The Employment Agreement also provides that Mr. Maxwell will be eligible to receive an annual cash bonus with a target percentage equal to 50% of his base salary and stock options and other long-term incentive awards up to 50% of his base salary. Pursuant to the Employment Agreement, the Company will pay Mr. Maxwell $22,000 per year for health benefits and $17,000 per year for pension benefits, as well as provide other customary employment benefits including paid vacation and sick leave.
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.