Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Richard A. Robert and Appointment of Richard Scott Sloan
On September 26, 2017, Richard A. Robert, the Executive Vice President and Chief Financial Officer of the Company notified the Company of his decision to resign, effective immediately. Mr. Robert’s decision to resign was not related to a disagreement with the Company over any of its operations, policies or practices. In connection with the foregoing, Mr. Robert has also resigned from the Board of Directors of the Company (the “Board”). Mr. Robert will receive the payments set forth in the Second Amended and Restated Employment Agreement, dated August 1, 2017, between Mr. Robert and the Company, a copy of which is filed as Exhibit 10.10 to the Form 8-K filed on August 2, 2017 (“Robert Agreement”) and is incorporated herein by reference. In connection with his departure, Mr. Robert’s non-competition provision under the Robert Agreement has been reduced from 6 months to three months. On September 29, 2017, the Company issued a press release announcing Mr. Robert’s resignation from his positions with the Company, a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K.
On September 27, 2017, the Company appointed Richard Scott Sloan as the Company’s Executive Vice President and Chief Financial Officer (“CFO”).
Mr. Sloan, age 53, has served on the Board since August 1, 2017 and will continue do so following his appointment as CFO. Mr. Sloan was a member of the Compensation Committee of the Board and the chairperson of the Audit Committee of the Board until he stepped down from these positions in connection with his appointment as CFO on September 27, 2017.
Most recently, from 2015 to 2016, Mr. Sloan oversaw strategic planning, new business development, and oil and gas marketing for Hess Corporation, as its Senior Vice President, Strategy, Commercial and Global New Business Development. Previously, Mr. Sloan held various senior leadership positions over his 25 year career at BP, including President of BP Russia, Director of M&A, and several regional Chief Financial Officer roles. Mr. Sloan also held board positions with TNK Holdings, Slavneft, Rusia Petroleum, In Salah Sales, and Medgaz. He received his BA in Economics from Colgate University and MBA in Corporate Finance from the University of Chicago.
On September 27, 2017, the Company entered into a letter agreement with Mr. Sloan (the “Letter”). The Letter contemplates that the Company will enter into an employment agreement (“Employment Agreement”) with Mr. Sloan that is substantially similar to the form of employment
agreement for the Company’s other senior executives as soon as practicable following the date thereof. As contemplated by the Letter the Employment Agreement will provide for: (i) an annual target bonus of at least 80% of Mr. Sloan’s base salary, subject to achievement of applicable performance goals, (ii) an initial award under the Company’s Management Incentive Plan with a grant date value that is at least 50% of grant date value of the award that is granted to the Company’s Chief Executive Officer (“CEO”), (iii) a “good reason” definition that includes the failure of the Company to implement each of a cash bonus and equity incentive plan that is broadly competitive with the Company’s oil and gas peer companies by April 1, 2018, and (iv) a change in control severance provision pursuant to which, upon an a termination without “cause” or Mr. Sloan’s resignation for “good reason,” in each case following a change in control, (x) Mr. Sloan’s unvested equity awards will immediately vest and (y) Mr. Sloan will receive a severance package consistent with the change in control payments and benefits provided to the CEO, provided that in the event that such a termination occurs in 2018, the severance payment will be equal to two times the sum of his base salary and target bonus amount.
Pursuant to the Letter, Mr. Sloan will receive an annual base salary of $510,000, and he will be guaranteed a minimum bonus of $127,500 with respect to his employment in 2017. In the event that Mr. Sloan’s employment is terminated by the Company without cause or Mr. Sloan resigns for good reason, other than in connection with a change in control, he will receive a lump-sum severance payment equal to no less than 30 months of his base salary.
The foregoing description is qualified in its entirety by reference to the full text of the Letter, which is attached as Exhibit 10.1 and incorporated herein by reference.
Mr. Sloan does not have any family relationships with any of the Company’s directors or executive officers, and he is not a party to any transactions listed in Item 404(a) of Regulation S-K.
Election of Randall Mark Albert as Director
On September 26, 2017, pursuant to a written consent of stockholders, the stockholders of the Company owning approximately 51% of the issued and outstanding shares of common stock entitled to vote thereon, elected Randall Mark Albert to fill the vacancy created by Mr. Robert’s resignation, effective immediately following Mr. Robert’s resignation. Mr. Albert was appointed to serve as a member of the Board’s Compensation Committee.
In consideration for his service on the Board, in accordance with the Board’s compensation policy for non-employee directors, Mr. Albert will receive (i) an annual cash retainer of $100,000, which will be paid quarterly in arrears and (ii) an annual equity grant of restricted stock units with a $100,000 grant date value that vests ratably on the first four anniversaries of the grant date, provided, however, that (a) the initial grant will be made as soon as possible following the Board’s adoption of form of award agreements under the management incentive plan and (b) 25% of the initial grant will vest immediately, with the remainder vesting ratably on the first three anniversaries of the grant date.
There is no arrangement or understanding between Mr. Albert and any other persons pursuant to which he was selected as a director. Mr. Albert has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.