Item 5.02
Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
On August 8, 2018, following the approval of the Compensation Committee of its Board of Directors, Jones Energy, Inc. (the
Company
) and Carl F. Giesler, Jr., the Companys new Chief Executive Officer, agreed to amend and restate the Employment Agreement (the
Original Agreement
) previously entered into between Jones Energy, LLC, a wholly owned subsidiary of the Company, and Mr. Giesler in order to revise certain terms of Mr. Gieslers compensation. The Company made these changes to facilitate broader structural adjustments to its compensation program. The amended and restated Original Agreement (the
Restated Agreement
) will reflect the grant of the inducement award (as hereinafter defined), including the terms thereof described in this Current Report on Form 8-K.
On August 8, 2018, the Company made a grant (the
inducement award
) to Mr. Giesler, effective July 23, 2018, which is the date Mr. Giesler commenced employment with the Company, of 3,000,000 Restricted Stock Units (
RSUs
), with each RSU representing one share of Class A common stock of the Company, which will vest in equal one-third installments on July 1, 2019, July 1, 2020 and July 1, 2021 subject to Mr. Gieslers continued employment. The grant was offered by the Company as a material inducement to Mr. Gieslers hiring as Chief Executive Officer outside the terms of the Companys Amended and Restated 2013 Omnibus Incentive Plan (the
Plan
) or any other incentive plan and was approved by the Compensation Committee of the Companys Board of Directors in reliance on the employment inducement exemption under the NYSEs Listed Company Manual Rule 303A.08.
In addition, the Restated Agreement will reflect the grant, which was made by the Company effective as of July 23, 2018, of a compensatory cash award in an aggregate amount of $320,000, which will vest and be paid out in equal one-third installments on April 1, 2019, October 1, 2019 and April 1, 2020. The cash award will be made pursuant to a cash award agreement under the Plan (the
Cash Award Agreement
).
The grant of 4,000,000 RSUs referred to in the Original Agreement prior to its amendment and restatement was modified to instead be comprised of the 3,000,000 RSUs and the compensatory cash award described in this Current Report on Form 8-K.
The RSUs subject to the inducement award and the cash award will fully vest upon Mr. Gieslers termination of employment prior to the final vesting date if (i) his termination is due to his death or disability, or (ii) if following a change in control (as defined in the award agreement relating to the RSUs or the Cash Award Agreement, as the case may be), his termination is by the Company without cause or by Mr. Giesler for good reason (as each of those terms are defined in the award agreement relating to the RSUs or the Cash Award Agreement, as the case may be).
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