CHORD ENERGY CORPORATION Item 1.01 Entry into a Material Definitive Agreement. The description of the New Employment Agreements (as defined in Item 5.02 below) and related equity grant agreements forTaylor L. Reid ,Michael H. Lou andNickolas J. Lorentzatos in Item 5.02 is incorporated by reference into this Item 1.01. Item 1.02 Termination of a Material Definitive Agreement. The information regarding the replacement of the Prior Employment Agreements (as defined in Item 5.02 below) forTaylor L. Reid ,Michael H. Lou andNickolas J. Lorentzatos in Item 5.02 is incorporated by reference into this Item 1.02. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Adoption of New Equity Incentive Program. As part of its Chapter 11 plan of reorganization, on emergence from bankruptcy,Oasis Petroleum, Inc. (the "Company") adopted its 2020 Long Term Incentive Plan (the "2020 LTIP"), a comprehensive equity-based award plan as part of the go-forward compensation for the Company's officers, directors, employees and consultants. The total number of shares of the Company's common stock reserved and available for delivery with respect to awards under the 2020 LTIP was 2,402,402 shares, which represents 10% of the total new equity at emergence on a fully diluted, fully distributed basis. In addition, the Company's plan of reorganization required the Company's Board of Directors (the "Board") to allocate 5% of the 10% total new equity reserved under the 2020 LTIP to the Company's no later than 45 days after emergence. The plan of reorganization also requires that the allocated equity consist solely of restricted stock units on terms (including performance metrics and vesting criteria) agreed upon between the Company's management and the Compensation Committee of the Board (the "Compensation Committee"). OnJanuary 18, 2021 , in order to satisfy this equity allocation requirement, the Compensation Committee of the Board approved a new equity incentive program, which consists of three types of restricted stock units: •Time-Vested Restricted Stock Units ("RSUs"): contingent shares vest 25% per year over four years to promote retention of key executives. •Relative Total Shareholder Return Performance Share Units ("PSUs"): •Contingent shares that may be earned over three and four years depending upon the Company's relative total shareholder return ("TSR") performance in comparison to pre-determined arrays of companies, as described below. Promote alignment with shareholder interests by rewarding for shareholder returns measured against potential alternative investments •Number of PSUs earned over the three- or four-year performance periods ranges from 0 to 150% of target, based on performance •50% of the PSU awards based on performance relative to the Company's oil & gas peers (divided evenly between the three- and four-year performance periods) •50% of the PSU awards based on performance relative to the broad-based Russell 2000 index (divided evenly between the three- and four-year performance periods) •Absolute TSR PSUs (also known as Leveraged Stock Units ("LSUs")): •Contingent shares that may be earned over three and four years depending upon the TSR performance of the Company's common stock measured against specific premium return objectives. This promotes alignment with shareholder interests by rewarding for the absolute increase in total shareholder returns. •50% of the LSU awards measured over three years, and 50% measured over four years •Number of LSUs earned over the three- or four-year performance periods ranges from 0 to 300% of target, based on performance In order to incentivize the Company's management team to achieve sustained stock performance over an extended period of time, as well as to satisfy the plan of reorganization's 2020 LTIP equity allocation requirement, the Compensation Committee's new equity incentive program is designed to represent a three-year grant. In other words, after the initial equity grants to be made in early 2021 under the new equity incentive program, the Compensation Committee does not intend to make any additional equity grants to any existing officers and directors who receive three-year grants until the 2024 fiscal year at the earliest. Initial Equity Grants to Named Executive Officers. OnJanuary 18, 2021 , the Compensation Committee made the following initial grants under the new equity incentive program (the "Initial Equity Grants") toTaylor L. Reid , President and Chief Operating Officer;Michael H. Lou , Executive Vice President and Chief Financial Officer; andNickolas J. Lorentzatos , Executive Vice President, General Counsel and Corporate Secretary (collectively, the "Named Executive Officers"): -------------------------------------------------------------------------------- Named Executive Officer Target Maximum Time-Vested RSUs Relative TSR PSUs Absolute TSR PSUs (LSUs) Time-Vested RSUs Relative TSR PSUs Absolute TSR PSUs (0-100%) (0-150%) (0-300%)(1) (LSUs)(1) Taylor L. Reid 29,604 29,604 46,856 29,604 44,406 140,568 Michael H. Lou 27,632 27,632 43,728 27,632 41,448 131,184 Nickolas J. Lorentzatos 16,776 16,776 26,552 16,776 25,164 79,656 (1)In addition to the 300% cap, the total number of shares of common stock that may be delivered under the LSUs shall not exceed 10 times the fair value of the LSUs as of the date of grant. In addition to these Initial Equity Grants, the Compensation Committee has also preliminarily allocated approximately 360,000 shares (at maximum performance achievement) reserved for the individual that becomes Chief Executive Officer as a result of the Company's previously-announced executive search, and an aggregate additional 500,000 shares (at maximum performance achievement) for a number of other officers and key employees. As previously disclosed, a total of 93,000 restricted shares have been granted to the Company's directors under the Company's non-employee director compensation program (including 15,500 restricted shares toDouglas E. Brooks , the Company's Board Chair and current Chief Executive Officer, pending the completion of the executive search described above). As a result of the Initial Equity Grants and these additional allocations and grants, approximately 6% out of the 10% of the equity reserved for issuance under the 2020 LTIP have been granted or otherwise allocated, assuming solely for this purpose that the maximum number of shares of common stock are earned under the allocations and grants. At target performance achievement, the grants and allocations would represent approximately 3.6% of the 10% reserved equity pool. For a description of the forfeiture and vesting provisions relating to the Initial Equity Grants, see "Initial Equity Grant Vesting Provisions" below. Reduction in Base Salaries for Named Executive Officers. An integral part of the Compensation Committee's determination of the size, composition and duration of the Initial Equity Grants was reducing the base salaries of the Named Executive Officers to bring them more in line with the Company's peers. These reductions were implemented in connection with the new employments described below in "New Employment Agreements for Named Executive Officers." Furthermore, even though the Named Executive Officers' performance bonus targets were not modified as a percentage of base salary, the base salary reductions will have the effect of reducing the absolute amount of their respective target performance bonuses: Named Executive Officer Base Salary Performance Bonus Target Percentage Performance
Bonus Target Amount
Prior Employment Agreements New Employment Agreement Prior Employment New Employment Prior Employment New Employment
Agreements Agreement Agreements
Agreement
Taylor L. Reid $600,000 $500,000 100% 100% $600,000 $500,000
Michael H. Lou $480,000 $450,000 100% 100% $480,000 $450,000
Nickolas J. Lorentzatos $425,000 $400,000 80% 80% $340,000 $320,000
New Employment Agreements for Named Executive Officers. As part of the
implementation of the new equity incentive plan, the Named Executive Officers
entered into new employment agreements (the "New Employment Agreements") that
were aligned with the Initial Equity Grants. These new agreements replaced the
then-existing employment agreements (the "Prior Employment Agreements") that had
been amended and restated in March 2018 and extended in September 2020 until
March 20, 2024 . The New Employment Agreements are scheduled to terminate on the
same date. With the exception of amount of compensation, severance and similar
economic terms, the three New Employment Agreements are substantially identical
with each other.
Termination of Employment. Under the New Employment Agreements, upon any
termination of employment, the Named Executive Officers are entitled to receive
(i) accrued but unpaid salary, (ii) any unpaid annual performance bonus earned
for the calendar year prior to the year in which the Named Executive Officer
terminates, (iii) reimbursement of eligible expenses and (iv) any employee
benefits due pursuant to their terms (collectively, the "Accrued Payments").
Death or Disability. If any of Messrs. Reid, Lou or Lorentzatos is terminated
due to death or "disability," then the Named Executive Officers will be entitled
to receive the following amounts: (i) the Accrued Payments, (ii) a pro-rata
portion of the annual performance bonus for the calendar year of termination,
(iii) an amount equal to 12 months' worth of the Named Executive Officer's base
salary, payable in a lump sum within 60 days following termination, and (iv)
reimbursement of
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COBRA premiums, if the Named Executive Officer elects and remains eligible for
COBRA, for up to 18 months following termination.
Non-Renewal of Employment Agreement. If a Named Executive Officer's employment
terminates by reason of the Company's non-renewal of the New Employment
Agreement at expiration, the Named Executive Officer is entitled to receive
reimbursement of COBRA premiums, if the Named Executive Officer elects and
remains eligible for COBRA, for up to 12 months following termination. Except
for this COBRA reimbursement obligation, and except as provided in any award
notices for the Initial Equity Grants (as described below) and any other equity
grants that may be made in the future, the non-renewal of the New Employment
Agreement does not entitle a Named Executive Officer to any severance benefits,
vesting of unvested equity grants or any other benefits. Under the Prior
Employment Agreements, non-renewal by the Company was treated as a termination
without "cause."
Termination Other Than for Cause or Good Reason. If the Company terminates the
employment of any of Messrs. Reid, Lou or Lorentzatos for reasons other than
"cause," or if the Named Executive Officer terminates employment for "good
reason," and, in each case, such termination is not on or within 18 months
following a "change in control," then the Named Executive Officer will be
entitled to receive the following amounts:
(1)the Accrued Payments;
(2)a pro-rata portion of the annual performance bonus for the calendar year of
termination;
(3)an amount equal to the Severance Multiple (as defined below) of the sum of
(a) the Named Executive Officer's base salary as of the date of termination,
plus (b) the aggregate of the product of (x) the Named Executive Officer's base
salary as of the date of termination and (y) the target bonus percentage
specified in such Named Executive Officer's New Employment Agreement (or such
higher percentage specified by the Board with respect to the calendar year in
which the date of termination occurs), payable in equal monthly installments
(with amounts in excess of certain limitations under Section 409A of the
Internal Revenue Code payable in a lump sum within 60 days); and
(4)reimbursement of COBRA premiums, if the Named Executive Officer elects and
remains eligible for COBRA, for up to 18 months following termination.
Severance amounts, other than the pro-rata bonus amount, are subject to the
Named Executive Officer's delivery to the Company (and non-revocation) of a
release of claims within 50 days of his termination date.
Severance Multiples. The New Employment Agreements modify the severance
multiples provided in the Prior Employment Agreements in connection with the
termination of a Named Executive Officer's employment without "cause" or by the
Named Executive Officer for "good reason." Under the New Employment Agreements,
the following changes were made:
Named Executive Officer Good Reason Termination without Cause For First 15 Months Termination without Cause After First 15
Months
Prior Employment Agreements New Employment Agreement Prior Employment Agreements(1) New Employment Prior Employment New Employment
Agreement Agreements Agreement
Taylor L. Reid 2X 1.5X 2X 2X 2X 1.5X
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The exhibit listed in the following Exhibit Index is filed as part of this
Current Report on Form 8-K.
Exhibit No. Description of Exhibit
99.1 Press Release issued by Oasis Petroleum Inc. on January 21, 2021
99.2 † New Employment Agreements, dated January 18, 2021, by and between Oasis
Petroleum Inc. and Taylor L. Reid
99.3 † New Employment Agreements, dated January 18, 2021, by and between Oasis
Petroleum Inc. and Michael H. Lou
99.4 † New Employment Agreements, dated January 18, 2021, by and between Oasis
Petroleum Inc. and Nickolas J. Lorentzatos
99.5 † Form of Notice of Grant for Restricted Stock Units(with form of associated
Restricted Stock Unit Agreement attached thereto)
Form of Notice of Grant for Relative Total Shareholder Return Performance
99.6 † Share Units (with form of associated Phantom ShareUnit Agreement attached
thereto)
Form of Notice of Grant for Absolute Total Shareholder Return Performance
99.7 † Share Units (with form of associated Phantom ShareUnit Agreement attached
thereto)
Cover Page Interactive Data File - the cover page interactive data file does
104 not appear in the Interactive Data File because itsXBRL tags are embedded
within the Inline XBRL document.
__________________† Indicates Management Compensatory Plan, Contract or Arrangement.
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