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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): November 28, 2023
Civitas Resources, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35371 | 61-1630631 | ||
| (State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(I.R.S.
Employer Identification No.) |
| 410 17th Street, Suite 1400 | |
| Denver, Colorado | 80202 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (720) 440-6100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each
exchange on which registered |
||
| Common Stock, par value $0.01 per share | CIVI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Kayla D. Baird as Chief Accounting Officer
On November 28, 2023, the board of directors of Civitas Resources, Inc. (the “Company”) appointed Kayla D. Baird as the new Senior Vice President and Chief Accounting Officer of the Company, effective January 3, 2024, reporting to the Company’s Chief Financial Officer. She will succeed Sandra K. Garbiso, who has served as the Company’s Chief Accounting Officer since November 2017.
Ms. Baird, age 52, joins the Company from Baytex Energy Corp. (TSX: BTE) (“Baytex”), where she served as Vice President, U.S. Accounting and Corporate Services since June 2023 when Baytex acquired Ranger Oil Corporation (“Ranger”), where she had served as Vice President, Chief Accounting Officer and Controller since February 2021. Prior to joining Ranger, Ms. Baird served as served as the Vice President, Chief Accounting Officer and Controller of EnVen Energy Corporation (“Enven”) from September 2017 through April 2020. Prior to joining Enven, she served as Chief Accounting Officer at Permian Resources, LLC (“Permian Resources”) from September 2014 until August 2017. Prior to Permian Resources, she served in various executive positions at ConocoPhillips, including Director of Lower 48 Strategy & Portfolio Management and Reserves Reporting & Compliance; Manager of Commercial Gas, Crude & NGL; and Manager of Upstream & Corporate Accounting Policy. Ms. Baird has 24 years of experience in the oil & gas industry. Previously, she worked for 13 years in public accounting, primarily for Ernst & Young, LLP, auditing large public oil and gas companies. Ms. Baird holds a bachelor’s degree in Accounting from Langston University and is a Certified Public Accountant.
There are no arrangements or understandings between Ms. Baird and any other person pursuant to which Ms. Baird was appointed as Senior Vice President and Chief Accounting Officer, and there are no family relationships among any of the Company’s directors or executive officers and Ms. Baird. Ms. Baird does not have any direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K.
Employment Letter with Kayla D. Baird
In connection with her appointment, the Company and Ms. Baird have entered into an employment letter (the “Employment Letter”) providing the following compensation terms: (i) an annualized base salary of $500,000 per year; (ii) eligibility to participate in the Company’s long term incentive program with a target award equal to $1,000,000 per year, with the number of shares of the Company’s common stock subject to Ms. Baird’s 2024 long term incentive awards (the “LTIP Awards”) equal to the quotient of (a) $1,000,000 divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the applicable grant date in early 2024 when long term incentive awards are granted to the Company’s executive officers (the “LTIP Grant Date”), which are expected to consist of: (1) 30% of the total target value in Restricted Stock Units (“RSUs”), subject to three-year ratable time vesting from the LTIP Grant Date; and (2) 70% of the total target value in Performance Share Units (“PSUs”) based on the Company’s absolute total shareholder return relative to pre-established goals during a measurement period of January 1, 2024 to December 31, 2026; (iii) a one-time grant of RSUs (the “Sign-On Award”) equal in number to the quotient of (a) $150,000 divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding January 3, 2024 (the “Sign-On Grant Date”), subject to three-year ratable time vesting from the Sign-On Grant Date; (iv) a one-time cash signing bonus (the “Signing Bonus”) in an amount equal to $250,000, subject to certain clawback requirements in the event of a voluntary resignation by Ms. Baird or termination by the Company for Cause (as defined in the Severance Plan) within two years of the Sign-On Grant Date; and (v) participation in the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”) as a Tier 3 Executive (as such term is defined in the Severance Plan). The RSUs and PSUs described above will be subject to the terms and conditions of award agreements that are substantially consistent with the award agreements issued to the other executive officers of the Company in respect of, for the Sign-On Award, the RSUs issued in 2023, and, for the LTIP Awards, the RSUs and PSUs issued in 2024.
As a Tier 3 Executive under the Severance Plan, upon the termination of Ms. Baird’s employment without Cause (as defined in the Severance Plan) or due to her resignation for Good Reason (as defined in the Severance Plan) (a “Qualifying Termination”), she will be eligible to receive (i) a cash severance payment equal to her then-current base salary, paid in equal monthly installments over a 12-month period following her termination and (ii) reimbursement for the cost of any COBRA premiums incurred by her during the 12-month period following her termination. If a Qualifying Termination occurs within 12 months following a Change in Control (as defined in the Severance Plan), she will be eligible to receive (i) a lump sum cash severance payment equal to 2.0x her then-current base salary and (ii) reimbursement for the cost of any COBRA premiums incurred by her during the 18 months following her termination.
The description of the Employment Letter is qualified in its entirety by the terms of the Employment Letter, a copy of which is attached as Exhibit 10.1 and incorporated by reference herein. Additionally, the description of the Severance Plan is qualified in its entirety by the terms of the Severance Plan, a copy of which is attached as Exhibit 10.2 and incorporated by reference herein.
In connection with her appointment, the Company will enter into its standard form of indemnity agreement with Ms. Baird, a copy of which is attached as Exhibit 10.3 and incorporated by reference herein.
Sandra K. Garbiso Departure
In connection with the Chief Accounting Officer transition, on November 29, 2023, Ms. Garbiso’s employment with the Company was terminated, effective January 3, 2024.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 29, 2023 | CIVITAS RESOURCES, INC. | |
| By: | /s/ Travis L. Counts | |
| Name: | Travis L. Counts | |
| Title: | Chief Administrative Officer and Corporate Secretary | |
Exhibit 10.1
 |
555
17th Street, Suite 3700 Denver, CO 80202 (303) 293-9100 phone |
November 28, 2023
PRIVATE & CONFIDENTIAL
Ms. Kayla D. Baird
323 W. 32nd Street
Houston, Texas 77018
via email – bairdkayla123@gmail.com
Re: Employment Terms and Conditions – Senior Vice President, Chief Accounting Officer
Dear Kayla:
Civitas Resources, Inc. (the “Company”) is pleased to offer you an employment position as Senior Vice President, Chief Accounting Officer (“CAO”), reporting to the Company’s Chief Financial Officer, effective as of January 3, 2024 (the “Start Date”). In summary, as CAO, your compensation will be:
| · | An annualized base salary of $500,000, subject to annual review and periodic increases at the discretion of the Company’s Board of Directors (the “Board”) and its Compensation Committee, to be paid in accordance with the Company’s payroll practices in effect from time to time, subject to all applicable withholdings and deductions; |
| · | Participation in the Company’s long term incentive plan (“LTIP”), subject to the terms and conditions of the LTIP and the award agreement(s) to be entered into thereunder, at the discretion of the Board and its Compensation Committee as further discussed below. The LTIP is administered by the Board and its Compensation Committee. Your annual “target” LTIP award will be equal to $1,000,000 per year. Your first LTIP award will be granted in early 2024, consistent in timing with the rest of the Company’s executive officers (the “Grant Date”), and the total number of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) included in your 2024 LTIP awards will be equal to the quotient of (i) $1,000,000 divided by (ii) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the Grant Date. Your 2024 LTIP awards are expected to consist of the following mix of award vehicles (each of which will be subject to award agreements consistent with the 2024 grants that will be made to other executive officers of the Company): |
| o | 30% of total target value in RSUs, subject to three-year ratable time vesting from the Grant Date; and |
| o | 70% of total target value in PSUs based on the Company’s absolute total shareholder return relative to pre-established goals during the measurement period 1/1/2024 to 12/31/2026; |
| · | A one-time grant of RSUs on the first day of your employment, using the form of award agreement consistent with the 2023 RSUs that have been granted to other executive officers of the Company, equal in number to the quotient of (i) $150,000 divided by (ii) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding your Start Date. The RSUs will vest ratably over a three-year period, one-third on each of the first three anniversaries of your Start Date; |
CORPORATE OFFICE
555 17th Street, Suite 3700
Denver, CO 80202
Office: 303.293.9100
| · | A one-time cash signing bonus (the “Signing Bonus”) in an amount equal to $250,000, subject to all applicable withholdings and deductions, payable upon the Company’s first regular payroll date following your Start Date. Notwithstanding the foregoing, you acknowledge and agree that if you voluntarily resign or the Company terminates your employment for Cause (as defined in the Severance Plan) (each, a “Termination Event”) (i) prior to the first anniversary of your Start Date, you shall repay to the Company the Signing Bonus in full and (ii) following the first but prior to the second anniversary of your Start Date, you shall repay to the Company 50% of the Signing Bonus, both within 30 days of such Termination Event; |
| · | Eligibility to participate in the Company’s 401(k) Plan, in accordance with such plan; |
| · | Eligibility to participate in the Company’s health insurance plans upon your election subject to the terms and conditions of the plans; |
| · | Eligibility to participate in the Company’s flexible benefit plan (Section 125 Plan); and |
| · | Participation in the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”) as a Tier 3 Executive (as such term is defined in the Severance Plan). |
Your participation in all Company compensation and benefit plans will be subject to the terms and conditions of such plans. The Company may modify compensation and benefits from time to time as it deems necessary in accordance with the terms and conditions of the plans set forth above and the Company’s policies. All forms of compensation paid to you as an employee of the Company will be paid less all applicable taxes and withholdings.
The terms and conditions of employment set forth in this Employment Letter are contingent upon your signing the Company’s Employee Restrictive Covenants, Proprietary Information and Inventions Agreement (the “PIIA”) attached hereto as Exhibit A.
You will be expected to abide by the Company’s rules and regulations, as such may be modified by the Company from time to time. This offer is contingent upon there not being any contractual impediments or obligations that would restrict your acceptance of this offer.
Notwithstanding anything to the contrary, your employment with the Company is AT WILL. You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company, subject only to any rights or obligations that may be required by the Severance Plan or the PIIA, each as may be amended from time to time. Likewise, the Company may terminate your employment at any time and for any reason whatsoever, with or without cause or advance notice, subject only to any rights and obligations that may be required by the Severance Plan or the PIIA, as each may be amended from time to time.
In consideration for the benefits to be provided to you under this Employment Letter to which you are not currently entitled, by executing this Employment Letter, you hereby (i) accept the terms of employment outlined in this Employment Letter and (ii) acknowledge and agree that this Employment Letter constitutes the entire agreement between you and the Company concerning your employment (except as otherwise may be set forth in the LTIP and any agreements entered into thereunder, the Severance Plan, the PIIA or any Indemnification Agreement entered into between you and the Company (collectively, the “Additional Agreements”)), and supersedes and terminates all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to its subject matters, except for the Additional Agreements. You agree that the Company has not made any promise or representation to you concerning this Employment Letter not expressed in this Employment Letter, and that, in signing this Employment Letter, you are not relying on any prior oral or written statement or representation by the Company, but are instead relying solely on your own judgment and the judgment of your legal and tax advisors, if any.
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If you have any questions or need additional information, please feel free to contact me.
| Sincerely, | ||
| /s/ M. Christopher Doyle | ||
| Name: | M. Christopher Doyle | |
| Title: | President and Chief Executive Officer | |
| Accepted and agreed: | |
| /s/ Kayla D. Baird | |
| Kayla D. Baird | |
| Date: November 28, 2023 |
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Exhibit A
Employee Restrictive Covenants, Proprietary Information and Inventions Agreement
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