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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Appointment of Timothy J. Cutt as Chief Executive Officer
On December 5, 2018, the Board of Directors (the
Board
) of QEP Resources, Inc. (the
Company
) appointed Timothy J. Cutt, 58, as a director and as the President and Chief Executive Officer of the Company, effective January 15, 2019. In connection with the appointment of Mr. Cutt, Charles B. Stanley
will retire as President and Chief Executive Officer of the Company, effective January 14, 2019. Upon Mr. Stanleys retirement, the Board will separate the Chairman and Chief Executive Officer roles, with David A. Trice serving as the
independent chairman of the Board until the Companys next annual meeting.
Mr. Cutt is a petroleum engineer with 35 years of
energy experience. Prior to joining the Company, Mr. Cutt was the Chief Executive Officer of Cobalt International Energy (
Cobalt
) from July 2016 until April 2018. Prior to joining Cobalt, Mr. Cutt served as
President of several BHP Billiton companies including the Petroleum Division (2013-2016) and Global Production (2007-2011). Mr. Cutt served in various roles at ExxonMobil in the prior 25 years, including President of ExxonMobil de Venezuela
(2005-2007), President ExxonMobil Canada Energy (2004-2005), President Hibernia Management & Development Company (2001-2004) and Regional Coordinator, North America (2000-2001).
In connection with his appointment as President and Chief Executive Officer, the Board approved the following compensation arrangements for
Mr. Cutt:
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annual base salary of $750,000;
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a
one-time
cash payment of $350,000 to be paid on March 1, 2019;
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eligibility to participate in the Companys annual incentive program, as described in the Companys
annual proxy statement filed with the Securities Exchange Commission on April 5, 2018 (the
Proxy Statement
), with a target incentive award of 100% of his base salary; and
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a
one-time
special equity grant with a value equal to $3.6 million,
comprised of (i) $1.8 million in restricted stock shares of the Company that will vest equally over a three year period in March of each year ending March 2022 and (ii) $1.8 million in performance share units, with the performance share
units paying out, if at all, in the first quarter of 2022.
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In addition to the compensation matters described above,
Mr. Cutt will be eligible to participate in the Companys Executive Severance Plan (Change in Control), as described in the Proxy Statement, in the event of certain terminations related to a change in control of the Company. Prior to the
occurrence of a change in control, Mr. Cutt will be eligible for certain severance benefits through September 2020 as provided in an Executive Severance Compensation Program letter (the
Severance Letter
), the terms of
which will be consistent with Mr. Stanleys existing letter described in the Companys annual report on Form
10-K
for the year ended December 31, 2017 filed with the Securities and Exchange
Commission on February 28, 2018 (the
Annual Report
).
The Company will also enter into an indemnification
agreement with Mr. Cutt upon joining the Company. The form of indemnification agreement is filed as Exhibit 10.8 to our Annual Report and is incorporated herein by reference.
There are no family relationships between Mr. Cutt and any director, executive officer or person nominated or chosen by the Company to
become a director or executive officer. Additionally, there have been no transactions involving Mr. Cutt that would require disclosure under Item 404(a) of Regulation
S-K.