Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Parsley Energy, Inc. Nonqualified Deferred Compensation Plan
On December 21, 2018, the Board of Directors (the
Board
) of Parsley Energy, Inc. (the
Company
) adopted the Parsley Energy, Inc. Nonqualified Deferred Compensation Plan (the
Plan
). The Plan is an unfunded nonqualified deferred compensation plan. The individuals who are eligible to participate in
the plan are directors and employees serving in the position of Vice President or more senior, including the Companys Named Executive Officers, who are selected by the Compensation Committee of the Board (the
Committee
) to
participate in the Plan. The Committee is the administrator of the Plan.
Under the Plan and in accordance with applicable tax laws and
the procedures established by the Committee, participants may elect to defer the receipt of the certain cash compensation, including, in the case of employee participants, up to 80% of base salary and all or a designated amount of bonus compensation
and, in the case of directors, all or a designated portion of annual retainers and meeting fees. In addition, participants may also elect to defer receipt of all or a designated amount of restricted stock unit awards (
RSUs
)
granted under the Parsley Energy, Inc. 2014 Long Term Incentive Plan (as amended and restated February 19, 2015). In addition to elective deferrals, the Plan also permits the Company to make matching and discretionary contributions to
participant accounts, as the Company may determine from time to time in its sole discretion. Participants are fully vested at all times in their elective deferrals and Company matching and discretionary contributions. Deferred cash amounts are
notionally invested in the available investment options elected by the participant, and all deferred RSUs are notionally invested in shares of the Companys Class A Common Stock, par value $0.01 per share.
Generally, payment of deferred amounts are made (or commence in the case of installments) on the first scheduled payment date following the
earliest to occur of (i) the distribution date specified in the participants deferral election, (ii) the participants separation from service, (iii) the participants death, (iv) the participants
disability, or (v) the occurrence of a change in control (each quoted term as defined in the Plan). Scheduled payment dates are March 1 and September 1 of each year. All payments under the Plan payable in
connection with a participants separation from service will be subject, if applicable, to delay to the extent required by Internal Revenue Code Section 409A. Participants may elect to receive payment in a lump sum or pursuant to a
permissible installment schedule selected by the Committee.
The foregoing description of the Plan does not purport to be complete and is
qualified in its entirety by reference to the full text of the Plan, which is attached as Exhibit 10.1 to this Current Report on Form
8-K
and incorporated into this Item 5.02 by reference.
Employment Agreements
On
December 28, 2018, Parsley Energy Operations, LLC (the
Employer
), an indirect majority-owned subsidiary of the Company, entered into Amended and Restated Employment, Confidentiality and
Non-Competition
Agreements with each of Matthew Gallagher and Ryan Dalton and a Second Amended and Restated Employment, Confidentiality and
Non-Competition
Agreement
with Colin Roberts (such agreements, collectively, the
Employment
Agreements
, and, each of Messrs. Gallagher, Dalton and Roberts, the
Executives
).
The Employment Agreements each have an initial
one-year
term that will automatically renew for
successive
one-year
periods until terminated. The Employment Agreements provide for annual base salaries of $550,000, $475,000 and $393,000 for Messrs. Gallagher, Dalton and Roberts, respectively, and an
annual bonus amount as determined by the Committee. Mr. Gallaghers agreement also provides that, subject to the Companys policies relating to corporate aircraft, he will be eligible to utilize Company-provided aircraft for personal
use in North America for up to 30 hours per calendar year and will not be required to reimburse the Company for costs relating to such use.
Pursuant to the Employment Agreements, in the event any of the Executives employment is terminated without cause or by the
applicable Executive for good reason (each quoted term as defined in the Employment Agreements), the applicable Executive would be entitled to (i) a
lump-sum
cash payment equal to
(A) two, in the case of Mr. Gallagher, and one and
one-half,
in the case of Messrs. Dalton and Roberts (in each case, the
Severance Multiple
), multiplied by (B)
2