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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On October 24, 2017, James J. Volker, the current Chairman, President and Chief Executive Officer of Whiting Petroleum Corporation (the
Company), notified the Company of his intent to retire from his position as President and Chief Executive Officer effective November 1, 2017. In addition, on October 24, 2017, the Board of Directors of the Company (the
Board) acted to elect Mr. Volker as (i) Executive Chairman of the Board of the Company effective November 1, 2017 until December 31, 2017 and (ii) Chairman of the Board of the Company from January 1, 2018
until the 2018 annual meeting of stockholders of the Company (the 2018 Annual Meeting) in a
non-executive
capacity.
Also on October 24, 2017, the Board acted to elect Bradley J. Holly as President and Chief Executive Officer of the Company and as a
director of the Company effective November 1, 2017. The Employment Agreement (as defined below) provides that Mr. Holly will be appointed Chairman of the Board of the Company at the 2018 Annual Meeting. Mr. Holly, age 46, brings more
than 20 years of experience in the oil and natural gas industry. Mr. Holly previously served as Executive Vice President, U.S. Onshore Exploration and Production for Anadarko Petroleum Corporation (Anadarko), an independent
exploration and production company, from May 2017 to October 2017. Prior to that, he served as Senior Vice President, U.S. Onshore Exploration and Production at Anadarko from September 2016. He was previously Senior Vice President, Operations for
Anadarkos Rocky Mountain Region from May 2013 to September 2016, and Vice President, Operations for the Southern and Appalachia Region from July 2012 to May 2013. Mr. Holly also previously served as General Manager of Anadarkos
Greater Natural Buttes area in eastern Utah and the Maverick Basin, which included the Eagleford Shale development in southern Texas, and Reserves and Planning Manager for the Southern and Appalachia Region. He joined Anadarko in 1997
as a reservoir engineer and development supervisor on Anadarkos Marco Polo and K2 developments in the deepwater Gulf of Mexico. Mr. Holly began his career in 1994 with Amoco. Mr. Holly holds a Bachelor of Science in
Petroleum Engineering from Texas Tech University, and he is a graduate of the Harvard Business School Advanced Management Program.
In connection with Mr. Holly becoming President and Chief Executive Officer, on October 24, 2017, the Compensation Committee of the
Board (the Committee) approved (i) a base salary for Mr. Holly of $765,000, (ii) an annual bonus target for Mr. Holly of 110% of his base salary based on the 2017 performance goals established by the Committee under the
Companys short-term incentive plan, provided that such annual bonus will be
pro-rated
for 2017 based on time of service, (iii) a
pro-rated
long-term equity
incentive grant for 2017 to Mr. Holly of restricted stock and/or stock-settled restricted stock units of $255,000, of which
one-third
will vest on each of the first three anniversaries of the grant date
and (iv) a
pro-rated
long-term equity incentive grant for 2017 to Mr. Holly of performance shares of $255,000, which performance shares will have a performance period beginning January 1, 2017
and ending December 31, 2019 with cliff vesting with the award payout level determined based on the Companys three-year total shareholder return relative to its compensation peer group. In addition, in recognition of Mr. Holly
forfeiting unvested equity awards and retirement compensation with his former employer, the Committee approved (i) payment to Mr. Holly of a cash signing bonus of $500,000, (ii) a grant to Mr. Holly of cash-settled restricted stock
units of $1,000,000, of which
one-third
will vest on each of the first three anniversaries of the grant date and (iii) a grant to Mr. Holly of restricted stock and/or stock settled restricted stock
units of $3,000,000, of which
one-third
will vest on each of the first three anniversaries of the grant date.
Also on October 24, 2017, the Committee approved and the Company entered into with Mr. Holly an Executive Employment and Severance
Agreement (the Employment Agreement) effective November 1, 2017. The Employment Agreement has a term that ends after one year and renews automatically for successive one year terms unless either party provides written notice to the
other party at least 180 days prior to the end of a term. The Employment Agreement provides that Mr. Holly is
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entitled to a base salary of $765,000, subject to increase, but not decrease, as may be determined by the Committee, and to participate in cash and equity incentive plans and employee benefit
plans that the Company generally provides to its senior executives. The Employment Agreement also provides that Mr. Holly is entitled to certain severance payments and other benefits upon a qualifying employment termination, including after a
Change of Control (as defined in the Employment Agreement) of the Company. If Mr. Hollys employment is terminated without Cause (as defined in the Employment Agreement) or for Good Reason (as defined in the
Employment Agreement) prior to the end of the employment term, Mr. Holly will be entitled to accrued but unpaid benefits, including a pro rata portion of the current years target annual bonus, and a lump sum severance benefit equal to
Mr. Hollys base salary multiplied by two, plus the target bonus for the year in which the termination occurs. If such termination occurs within two years following a Change of Control, the multiplier of base salary described in the
previous sentence is increased to three. Additionally, until the earlier of 18 months following a qualified termination (or 24 months if such termination follows a Change of Control) or such time as Mr. Holly has obtained new employment and is
covered by benefits at least equal in value, Mr. Holly will continue to be covered, at the expense of the Company, by the same or equivalent life insurance, hospitalization, medical, dental and vision coverage as Mr. Holly received prior
to termination. To receive the foregoing benefits, Mr. Holly must execute and deliver to the Company (and not revoke) a general release of claims. The Employment Agreement also provides Mr. Holly with the following after a Change of
Control has occurred: (i) Mr. Hollys employment term is automatically extended for a
two-year
period; (ii) accelerated vesting of Mr. Hollys restricted stock, restricted stock
units and performance shares; (iii) the same base salary and a bonus opportunity at least equal to 100% of the prior years target award and with the same general probability of achieving performance goals as was in effect prior to the
Change of Control; and (iv) participation in salaried and executive officer benefit plans that provide benefits, in the aggregate, at least as great as the benefits being provided prior to the Change of Control. The Employment Agreement also
provides that Mr. Holly is subject to a customary confidentiality covenant and, for one year following termination of employment (or two years if the termination is after a Change of Control), customary covenants not to solicit and not to
compete with the Companys business in its material plays or fields.
In connection with Mr. Volker retiring as President and
Chief Executive Officer and becoming Executive Chairman of the Board, on October 24, 2017, the Compensation Committee of the Board approved and the Company entered into with Mr. Volker an Amended and Restated Executive Employment and
Severance Agreement (the Amended Agreement) effective November 1, 2017. The Amended Agreement has a term that ends on December 31, 2017 and has terms substantially similar to the current Employment and Severance Agreement
between the Company and Mr. Volker except that upon Mr. Volkers retirement as Executive Chairman of the Board on December 31, 2017 (i) Mr. Volker will serve as a
non-executive
Chairman of the Board until the 2018 Annual Meeting, for which he will be paid annual cash compensation equal to $268,000, (ii) Mr. Volkers unvested time-based vesting restricted stock awards granted in 2015, 2016 and 2017 will continue
to vest per their original vesting schedules subject to Mr. Volkers compliance with his
non-solicitation
and
non-competition
covenants,
(iii) Mr. Volkers unvested performance-based vesting restricted stock awards granted in 2015, 2016 and 2017 will continue to vest per their original vesting schedules but only in the event they are earned based on their applicable
performance criteria and subject to Mr. Volkers compliance with his
non-solicitation
and
non-competition
covenants, and (iv) Mr. Volkers
covenants not to solicit and not to compete with the Companys business in its material plays or fields will be extended from one year to three years following termination of employment.
The foregoing descriptions of the Employment Agreement and the Amended Agreement are qualified in their entirety by reference to the full text
of the Employment Agreement and the Amended Agreement, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.
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On October 24, 2017, the Committee also approved forms of Restricted Stock Unit Award
Agreement (Cash-Settled) and Restricted Stock Unit Award Agreement (Stock-Settled) for use under the Companys 2013 Equity Incentive Plan, copies of which are attached hereto as Exhibits 10.3 and 10.4, respectively, and are incorporated herein
by reference.