|
Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
On
September 30, 2020, the Company issued a press release announcing that its Board of Directors (the “Board”) appointed
Mr. Paul D. McKinney as Chief Executive Officer (“CEO”) and Chairman of the Board, effective October 1, 2020. A copy
of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K. In connection with the appointment of Mr.
McKinney, Lloyd T. Rochford, Chairman of the Board, and Kelly Hoffman, CEO, will resign from their respective positions, effective
as of October 1, 2020. Mr. Rochford and Mr. Hoffman also resigned from the Board on October 1, 2020, effective October 1, 2020.
Immediately prior
to joining the Company, Mr. McKinney, age 61, held the position of President, CEO and Director of SandRidge Energy for
approximately one year. Prior to SandRidge Energy, from June 2014 to January 2019, Mr. McKinney served in various positions
with Yuma Energy, Inc., including President and Chief Operating Officer. Mr. McKinney is an industry veteran with over 30
years of experience in the oil and gas sector. He began his career in 1983 with Anadarko Petroleum Corporation. Over a
23-year period with Anadarko, Mr. McKinney held various positions including his last title as Vice President of Reservoir
Engineering, Anadarko Canada Corporation. From 2007 through 2013, Mr. McKinney held various positions at Apache Corporation,
serving as Manager, Corporate Reservoir Engineering and Region Vice President, Gulf Coast Onshore, where he was responsible
for the development and all operational aspects of the Gulf Coast region for Apache.
In connection with
Mr. McKinney’s appointment as CEO and Chairman of the Board, on September 30, 2020, Mr. McKinney entered into an employment
and severance agreement with the Company. The term of the agreement commenced on October 1, 2020 and will continue until employment
is terminated by either Mr. McKinney or the Company. Mr. McKinney will receive a minimum base salary at an annual rate of $480,000.
The base salary will be reviewed annually by the Board and may be adjusted upward in the Board’s sole discretion, but not
downward.
For each calendar year
during Mr. McKinney’s employment term, beginning in 2021, Mr. McKinney will (i) be eligible to participate in an annual incentive
compensation plan of the Company, and (ii) will be eligible to receive annual long-term equity incentive awards under the Company’s
2013 Long-Term Incentive Plan or any successor plan, with a target value equal to a percentage of base salary, determined by the
Board (based on the grant date value of any such award), based on the achievement of performance goals established by the Board
in its sole discretion under any incentive compensation plan or arrangement as may be established by the Board from time to time.
Mr. McKinney shall
receive as bonus consideration for the remainder of 2020 an amount equal to $18,000 per month and shall receive a sign-on equity
grand of 300,000 shares of the Company’s restricted stock awarded on Mr. McKinney’s first day of employment (the “Award
Date”), and the restricted stock shall have a three-year vesting period, such vesting period to begin on the Award Date,
and shall be subject to the terms and conditions of the award agreements pursuant to which they are granted.
Mr. McKinney will also
be subject to certain non-competition and non-solicitation restrictions for a period of one year following any termination of employment,
as well as certain confidentiality restrictions that apply indefinitely.
The foregoing description
of the Company’s employment agreement with Mr. McKinney is not complete and is subject in its entirety by reference to the
terms of such employment agreement, a copy of which is included as Exhibit 10.1 to this Current Report on Form 8-K.