Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
Employment Agreement with Chief Executive Officer
On January 24, 2020, Sundance Energy Inc. (the "Company"), and its wholly owned
subsidiary Sundance Energy, Inc., a Colorado corporation ("SEINC") entered into
a new employment agreement with Eric P. McCrady, the Company's chief executive
officer. Mr. McCrady's new employment agreement replaces and supersedes his
prior employment agreement with SEINC.
Mr. McCrady's employment agreement provides that he will serve as chief
executive officer of the Company for a three year term through January 23,
2023. Mr. McCrady's employment agreement also provides for the following:
(i) an annual base salary of $485,000 (the same annual base salary provided for
in Mr. McCrady's prior employment agreement with SEINC); (ii) an annual cash
performance bonus having a target of 100% of his annual base salary, to be based
on such criteria and achievements as determined by the Company's compensation
committee; (iii) cash or equity awards that may be awarded by the Company's
compensation committee in accordance with any long-term incentive plans or
equity incentive plans that may be adopted by the Company's board of directors
from time to time; and (iv) such other benefits, including health insurance and
vacation, to the same extent as such benefits are available to the Company's
other executive officers.
Mr. McCrady's employment agreement provides that either the Company or
Mr. McCrady can terminate his employment relationship. The Company's right to
terminate Mr. McCrady's employment is subject to its obligation to make certain
severance payments and provide certain other benefits to Mr. McCrady, depending
upon the circumstances under which the employment relationship is terminated.
The Company is generally not obligated under Mr. McCrady's employment agreement
to provide any severance payments or benefits if Mr. McCrady is terminated for
good cause or if Mr. McCrady resigns without good reason. If Mr. McCrady's
employment is terminated by the Company without good cause, or Mr. McCrady
resigns for good reason, in each case other than in connection with a change of
control (as defined in Mr. McCrady's employment agreement), Mr. McCrady will be
entitled to receive: (i) a lump sum cash payment equal to the greater of
(a) Mr. McCrady's base salary for 24 months and (b) the amount of base salary
that would have been payable to Mr. McCrady for the remaining portion of the
employment term under the employment agreement; (ii) the average of his annual
bonus for the two fiscal years prior to the termination; (iii) Mr. McCrady's
target annual bonus for the year in which the termination occurred; and
(iv) continued coverage under the Company's health and welfare benefits programs
for the shorter of (A) 12 months following Mr. McCrady's termination (or the end
of the original employment term under the employment agreement, whichever is
later) and (B) the date on which Mr. McCrady obtains comparable coverage under a
subsequent employer plan. If Mr. McCrady's employment is terminated by the
Company without good cause, or Mr. McCrady resigns for good reason, in each case
within 24 months following a change of control, Mr. McCrady will be entitled to
receive the same severance amounts described above, except that Mr. McCrady will
be entitled to receive continued coverage under the Company's health and welfare
benefits programs for the shorter of (1) 18 months following Mr. McCrady's
termination (or the end of the original employment term under the employment
agreement, whichever is later) and (2) the date on which Mr. McCrady obtains
comparable coverage under a subsequent employer plan, and the accelerated
vesting of any outstanding long term incentive awards, with any such awards that
are subject to performance-based vesting becoming payable at the target level
and in an amount that is pro-rated to reflect the portion of the applicable
performance or vesting period prior to termination.
Mr. McCrady's employment agreement also contains various other ordinary and
customary covenants for the Company's benefit by Mr. McCrady with respect to
trade secrets, non-competition, non-solicitation and confidentiality.
The foregoing description of Mr. McCrady's employment agreement is qualified in
its entirety by reference to the text of such agreement, which is filed as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference to
this Item 5.02.
Employment Agreement with Chief Financial Officer
On January 24, 2020, the Company and SEINC also entered into an employment
agreement with Cathy L. Anderson, the Company's chief financial officer.
Ms. Anderson was not previously a party to any written employment agreement with
the Company or any of its subsidiaries.
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Ms. Anderson's employment agreement provides that she will serve as chief
financial officer of the Company for a three year term through January 23,
2023. Ms. Anderson's employment agreement also provides for the following:
(i) an annual base salary of $377,500; (ii) an annual cash performance bonus
having a target of 75% of her annual base salary, to be based on such criteria
and achievements as determined by the Company's compensation committee;
(iii) cash or equity awards that may be awarded by the Company's compensation
committee in accordance with any long-term incentive plans or equity incentive
plans that may be adopted by the Company's board of directors from time to time;
and (iv) such other benefits, including health insurance and vacation, to the
same extent as such benefits are available to the Company's other executive
officers.
Ms. Anderson's employment agreement provides that either the Company or
Ms. Anderson can terminate her employment relationship. The Company's right to
terminate Ms. Anderson's employment is subject to its obligation to make certain
severance payments and provide certain other benefits to Ms. Anderson, depending
upon the circumstances under which the employment relationship is terminated.
The Company is generally not obligated under Ms. Anderson's employment agreement
to provide any severance payments or benefits if Ms. Anderson is terminated for
good cause or if Ms. Anderson resigns without good reason. If Ms. Anderson's
employment is terminated by the Company without good cause, or Ms. Anderson
resigns for good reason, in each case other than in connection with a change of
control (as defined in Ms. Anderson's employment agreement), Ms. Anderson will
be entitled to receive: (i) a lump sum cash payment equal to the greater of
(a) Ms. Anderson's base salary for 18 months and (b) the amount of base salary
that would have been payable to Ms. Anderson for the remaining portion of the
employment term under the employment agreement; (ii) the average of her annual
bonus for the two fiscal years prior to the termination; (iii) Ms. Anderson's
target annual bonus for the year in which the termination occurred; and
(iv) continued coverage under the Company's health and welfare benefits programs
for the shorter of (A) 12 months following Ms. Anderson's termination (or the
end of the original employment term under the employment agreement, whichever is
later) and (B) the date on which Ms. Anderson obtains comparable coverage under
a subsequent employer plan. If Ms. Anderson's employment is terminated by the
Company without good cause, or Ms. Anderson resigns for good reason, in each
case within 24 months following a change of control, Ms. Anderson will be
entitled to receive the same severance amounts described above, except that
Ms. Anderson will be entitled to receive continued coverage under the Company's
health and welfare benefits programs for the shorter of (1) 18 months following
Ms. Anderson's termination (or the end of the original employment term under the
employment agreement, whichever is later) and (2) the date on which Ms. Anderson
obtains comparable coverage under a subsequent employer plan, and the
accelerated vesting of any outstanding long term incentive awards, with any such
awards that are subject to performance-based vesting becoming payable at the
target level and in an amount that is pro-rated to reflect the portion of the
applicable performance or vesting period prior to termination.
Ms. Anderson's employment agreement also contains various other ordinary and
customary covenants for the Company's benefit by Ms. Anderson with respect to
trade secrets, non-competition, non-solicitation and confidentiality.
The foregoing description of Ms. Anderson's employment agreement is qualified in
its entirety by reference to the text of such agreement, which is filed as
Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference to
this Item 5.02.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibit
10.1 Employment Agreement, dated January 24, 2020, by and among Sundance
Energy Inc., a Delaware corporation, its wholly owned subsidiary
Sundance Energy, Inc., a Colorado corporation, and Eric P. McCrady
10.2 Employment Agreement, dated January 24, 2020, by and among Sundance
Energy Inc., a Delaware corporation, its wholly owned subsidiary
Sundance Energy, Inc., a Colorado corporation, and Cathy L.
Anderson
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