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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): May 7, 2025
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.) |
555 17th Street, Suite 3700
Denver, Colorado 80202
(Address of principal executive offices, including zip code)
(303) 293-9100
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation 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 | Name of 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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 Clayton A. Carrell as President and Chief Operating Officer
On May 7, 2025, Civitas Resources, Inc. (the “Company”) appointed Clayton A. Carrell as the new President and Chief Operating Officer of the Company, effective immediately, reporting to the Company’s Chief Executive Officer.
Mr. Carrell, age 59, has over 25 years of management experience and over 35 years of oil and gas operations experience. Mr. Carrell joins the Company from Southwestern Energy Company (“Southwestern”), where he served as Executive Vice President and Chief Operating Officer from December 2017 until October 2024 when Southwestern merged with Chesapeake Energy Corporation to form Expand Energy Corporation. Prior to joining Southwestern, Mr. Carrell served as the Executive Vice President and Chief Operating Officer of EP Energy Corporation (“EPC”) from August 2013 to November 2017 and of EP Energy LLC (“EP LLC” and, together with EPC, “EP Energy”) from May 2012 to November 2017. Prior to Mr. Carrell’s service at EP Energy, he served as the Senior Vice President and Chief Engineer and as the Vice President, Texas Gulf Coast Division of EP Energy’s predecessor, El Paso Exploration & Production Company (“El Paso E&P”), from June 2010 to May 2012 and March 2007 to June 2010, respectively. Prior to joining El Paso E&P, Mr. Carrell served as the Vice President, Engineering & Operations of People Energy Production from February 2001 to March 2007. Mr. Carrell holds a Bachelor of Science in Petroleum Engineering from Texas A&M University.
There are no arrangements or understandings between Mr. Carrell and any other person pursuant to which Mr. Carrell was appointed as President and Chief Operating Officer, and there are no family relationships among any of the Company’s directors or executive officers and Mr. Carrell. Mr. Carrell 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 and Employment Side Letter with Clayton A. Carrell
In connection his appointment, the Company and Mr. Carrell have entered into an employment letter (the “Employment Letter”) and an employment side letter (the “Employment Side Letter”) providing for the following compensation terms: (i) an annualized base salary of $875,000 per year; (ii) eligibility to participate in the Company’s long term incentive program with a target award equal to $2,625,000 per year (the “Target Award Value”), with the number of shares of the Company’s common stock subject to Mr. Carrell’s 2025 long term incentive awards (the “LTIP Awards”) equal to the quotient of (a) the Target Award Value divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding Mr. Carrell’s first day of employment (the “Grant Date”), and consist of (1) 30% of the Target Award Value in restricted stock units (“RSUs”), subject to three-year ratable time vesting from the Grant Date; and (2) 70% of the Target Award Value in performance stock units (“PSUs”) based on the Company’s absolute total shareholder return relative to pre-established goals during the measurement period beginning on January 1, 2025 and ending on December 31, 2027; (iii) in consideration of Mr. Carrell’s commitment to purchase, subject to compliance with applicable law and the Company’s policies and procedures, an aggregate of $875,000 of the Company’s common stock in open market transactions by December 31, 2025, a one-time grant of RSUs (the “Equity Sign-On Award” and, together with the LTIP Awards, the “Equity Awards”) equal in number to the quotient of (a) $875,000 divided by (b) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the Grant Date, subject to three-year ratable time vesting from the Grant Date; (iv) a one-time cash sign-on grant of $500,000 payable within 30 days following the Grant Date (the “Cash Sign-On Award” and, together with the Equity Awards, the “Awards”), subject to certain repayment requirements in the event of Mr. Carrell’s voluntary resignation by Mr. Carrell without Good Reason (as defined in the Severance Plan), termination by the Company for Cause (as defined in the Severance Plan), or death within two years of the Grant Date; (v) and participation in the Civitas Resources, Inc. Eighth Amended and Restated Executive Change in Control and Severance Benefit Plan (the “Severance Plan”) as a Tier 2 Executive (as such term is defined in the Severance Plan). The Awards will be subject to the terms and conditions of, (i) with respect to the Equity Awards, the award agreements that are substantially consistent with the award agreements issued to the other executive officers of the Company in respect of the RSUs and PSUs issued to such executive officers in 2025 and (ii) with respect to the Cash Sign-On Award, the Cash Award Agreement under the Civitas Resources, Inc. 2024 Long Term Incentive Plan.
As a Tier 2 Executive under the Severance Plan, upon the termination of Mr. Carrell’s employment without Cause or due to his resignation for Good Reason (a “Qualifying Termination”), Mr. Carrell will be eligible to receive (i) a cash severance payment equal to 150% of his then-current base salary, paid in equal monthly installments over a 12-month period following his termination and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 12-month period following his termination. If a Qualifying Termination occurs within 12 months following a Change in Control (as defined in the Severance Plan), Mr. Carrell will be eligible to receive (i) a lump sum cash severance payment equal to 250% of his then-current base salary and (ii) reimbursement for the cost of any COBRA premiums incurred by him during the 18 months following his termination.
The descriptions of the Employment Letter, Employment Side Letter, and Severance Plan are qualified in their entirety by the terms thereto, copies of which are attached as Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3, respectively, and incorporated by reference herein.
In connection with his appointment, the Company entered into its standard form of indemnity agreement with Mr., Carrell, a copy of which is attached as Exhibit 10.4 and incorporated by reference herein.
M. Christopher Doyle Cessation of Assumption of Principal Operating Officer Role
As previously disclosed, on February 24, 2025, M. Christopher Doyle, the Company’s current Chief Executive Officer, assumed the additional role of principal operating officer of the Company in connection with the termination of employment of T. Hodge Walker, the Company’s former Chief Operating Officer. Concurrently with the effectiveness of Mr. Carrell’s appointment as President and Chief Operating Officer, Mr. Doyle ceased his assumption of the additional role of principal operating officer of the Company.
| Item 7.01. | Regulation FD Disclosure. |
On May 7, 2025, the Company issued a press release announcing Mr. Carrell’s appointment as the President and Chief Operating Officer of the Company. The full text of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to Item 7.01 in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
SIGNATURE
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.
| CIVITAS RESOURCES, INC. | ||
| Date: May 7, 2025 | By: | /s/ Adrian Milton |
| Name: | Adrian Milton | |
| Title: | Senior Vice President, General Counsel and Assistant Corporate Secretary | |
Exhibit 10.1
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555 17th Street, Suite 3700 Denver, CO 80202 (303) 293-9100 phone
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May 7, 2025
PRIVATE & CONFIDENTIAL
Mr. Clay Carrell
via email – ___________________
| Re: | Employment Terms and Conditions– President & Chief Operating Officer |
Dear Clay:
Civitas Resources, Inc. (the “Company”) is pleased to offer you an employment position as President & Chief Operating Officer (“President & COO”), reporting to the Company’s Chief Executive Officer, effective as of May 7, 2025. In summary, as President & COO, compensation will be:
| · | An annualized base salary of $875,000, subject to annual review and periodic increases at the discretion of the Company’s Board of Directors (the “Board”), 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 2024 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 $2,625,000 per year. For 2025, you will receive your LTIP awards on the first day of your employment (the “Grant Date”), and the total number of Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”) included in your 2025 LTIP awards will be equal to the quotient of (i) $2,625,000 divided by (ii) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the Grant Date (the “Grant Date Price”). Your 2025 LTIP awards will consist of the following mix of award vehicles (each of which will be subject to award agreements consistent with the 2025 grants that have been 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 1/1/2025 to 12/31/2027. |
| · | In connection with your agreement to purchase, subject to compliance with applicable law and the Company’s policies and procedures, an aggregate of $875,000 of the Company’s common stock in open market transactions by December 31, 2025 at the fair market value on the purchase date(s), a one-time grant to you on the Grant Date of RSUs, using the form of award agreement consistent with the 2025 RSUs that have been granted to other executive officers of the Company, equal in number to the quotient of (i) $875,000 divided by (ii) the Grant Date Price. The RSUs will vest ratably over a three-year period, one-third on each of the first three anniversaries of the Grant Date; | |
| · | A one-time cash sign-on bonus of $500,000, subject to all applicable withholdings and deductions and any applicable repayment terms, payable promptly (and in any event within 30 days) following the Grant Date; | |
| · | Eligibility to participate in the Company’s 401(k) Plan, in accordance with such plan; |
CORPORATE OFFICE
555 17th Street, Suite 3700
Denver, CO 80202
Office: 303.293.9100
| · | 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 2 Executive (as such term is defined in the Severance Plan). |
Participation in all Company compensation and benefit plans would 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 an employee of the Company would 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.
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.
| Page |
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: | Chief Executive Officer | |
Accepted and agreed:
| /s/ Clay Carrell | ||
| Clay Carrell | ||
| Date: | May 7, 2025 | |
| Page |
Exhibit A
Employee Restrictive Covenants, Proprietary Information and Inventions Agreement
| Page |
Exhibit 10.2
Via Email
May 7, 2025
Clay Carrell
Re: Employment Side Letter re Repayment Obligation
Dear Clay:
Civitas Resources, Inc. (the “Company”) proposes to pay you a one-time lump-sum cash payment of $500,000 (the “Sign-On Bonus”), less applicable tax withholding, pursuant to the Offer Letter (as defined below), in connection with your employment as President and Chief Operating Officer of the Company. The Sign-On Bonus will be a “Cash Award” under the Civitas Resources, Inc. 2024 Long Term Incentive Plan and be subject to those terms and conditions set forth in that certain employment offer letter dated as of the date hereof by and between you and the Company (“Offer Letter”) and herein. As a material inducement to your and the Company’s entry into the Offer Letter and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, you and the Company hereby agree to the terms and conditions set forth in this letter agreement (this “Agreement”).
| 1. | Repayment. |
| a. | If on or after your first day of employment with the Company (the “Employment Date”) but prior to the one (1)-year anniversary date of the Employment Date (the “First Milestone Date”), your employment with the Company Group terminates for any reason other than a Qualifying Termination (as defined below), then you must pay to the Company, within thirty (30) days following such termination, an amount equal to one-hundred percent (100%) of your Sign-On Bonus (the “Full Repayment Amount”). |
| b. | If, on or after the First Milestone Date but prior to the two (2)-year anniversary date of the Employment Date (the “Second Milestone Date”), your employment with the Company Group terminates for any reason other than a Qualifying Termination, then you must pay to the Company, within thirty (30) days following such termination, an amount equal to fifty percent (50%) of your Sign-On Bonus (the “Partial Repayment Amount”). |
| c. | For the sake of clarity, you will not be required to pay the Full Repayment Amount or the Partial Repayment Amount if, on and after the Employment Date, you remain employed with the Company Group through the First Milestone Date and/or Second Milestone Date, as applicable, or if your employment is terminated as a result of a Qualifying Termination. |
| 2. | Definitions. For purposes of this Agreement, the following words have the meanings ascribed to them in this Section 2: |
| a. | “Affiliate” has the meaning ascribed to such term in the Severance Plan. |
| b. | “Cause” has the meaning ascribed to such term in the Severance Plan. |
| c. | “Company Group” means the Company and its Affiliates. |
| d. | “Disability” has the meaning ascribed to such term in the Severance Plan. |
| e. | “Good Reason” has the meaning ascribed to such term in the Severance Plan and includes the procedural requirements set forth in Section 9(f)(ii) of the Severance Plan. |
| f. | “Qualifying Termination” means the termination of your employment with a member of the Company Group (a) by the applicable member of the Company Group at a time when Cause does not exist, (b) as a result of your resignation for Good Reason, or (c) due to your death or Disability. |
| g. | “Severance Plan” means the Company’s Eighth Amended and Restated Executive Change in Control and Severance Plan, as may be amended from time to time. |
| 3. | Governing Law; Venue; Attorney Fees. This Agreement and any claim, controversy or dispute arising under or related to this Agreement or the relationship of the parties will be governed by and construed in accordance with the laws of the State of Texas without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Texas or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Texas. The venue for any action brought under this Agreement shall be Harris County, Texas. The prevailing party, as finally determined by any court or competent jurisdiction, in any action or proceeding arising out of or relating to this Agreement or the subject matter hereof shall be entitled to recover all of its reasonable attorneys’ fees and other expenses of litigation actually incurred in connection with such action or proceeding. |
| 4. | Severability. In the event that any provision of this Agreement (or portion thereof) will be illegal or invalid for any reason, said illegality or invalidity will not affect the remaining parts hereof, but this Agreement will be construed and enforced as if such illegal and invalid provision never existed. |
| 5. | Non-Assignment; Successors. This Agreement is personal to each of the parties hereto. Except as provided in this Section 4, no party may assign or delegate any rights or obligations hereunder. Any purported assignment or delegation by either party in violation of this Section 4 will be null and void ab initio and of no force or effect. Notwithstanding the foregoing, the Company may assign this Agreement without your consent to any other member of the Company Group or to any successor to all or substantially all of the business and/or assets of the Company that assumes in writing, or by operation of law, the obligations of the Company hereunder. |
| 6. | Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile, PDF or other electronic means), each of which will be deemed to be an original but all of which together will constitute one and the same instrument. |
| 7. | Entire Agreement; Amendment. This Agreement, together with the Offer Letter, constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes any and all prior agreements or understandings between you and the Company with respect to the subject matter hereof, whether written or oral. This Agreement may be amended or modified only by a written instrument executed by you and the Company. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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On behalf the Company, I look forward to your contributions to the growth and success of the Company and its business.
| Very truly yours, | |||
| Civitas Resources, Inc. | |||
| By: | /s/ M. Christopher Doyle | ||
| Name: | M. Christopher Doyle | ||
| Title: | Chief Executive Officer | ||
Acknowledged and agreed:
| /s/ Clay Carrell | ||
| Clay Carrell | ||
| Dated: | May 7, 2025 | |
Signature Page –Employment Side Letter re Repayment Obligation
Exhibit 99.1
Civitas Resources, Inc. Announces Clay Carrell President and Chief Operating Officer
DENVER — May 7, 2025 - Civitas Resources, Inc. (NYSE: CIVI) (“Civitas” or the “Company”) announced that Clay Carrell has joined the Company as President and Chief Operating Officer, effective today.
Chris Doyle, Chief Executive Officer, said, “On behalf of the Board of Directors and the Company, I am excited to welcome Clay to the Civitas team. He brings proven leadership experience, having successfully managed multi-basin development programs and the effective deployment of best practices to safely lower costs and enhance margins. Clay’s experience will help ensure that we maximize the value of our quality asset base as we execute our strategic objectives.”
Carrell said, “I am thrilled to join this talented team. There is significant opportunity ahead for Civitas, and I look forward to working together to deliver value for shareholders from our scaled development programs in the Permian and DJ Basins.”
Mr. Carrell most recently served as the Executive Vice President & Chief Operating Officer of Southwestern Energy until its merger with Chesapeake Energy. Prior to joining Southwestern Energy, Mr. Carrell served as Executive Vice President and Chief Operating Officer of EP Energy. He joined El Paso Corporation in 2007, where he held various leadership roles and helped establish EP Energy as an independent company before being named Chief Operating Officer in 2012. Mr. Carrell has worked in the energy industry for over 35 years serving in various U.S. and international engineering and management roles at ARCO Oil and Gas Company, Burlington Resources and Peoples Energy Production. Mr. Carrell holds a bachelor’s degree in Petroleum Engineering from Texas A&M University.
About Civitas
Civitas Resources, Inc. is an independent exploration and production company focused on the acquisition, development and production of crude oil and liquids-rich natural gas from its premier assets in the Permian Basin in Texas and New Mexico and the DJ Basin in Colorado. Civitas’ proven business model to maximize shareholder returns is focused on four key strategic pillars: generating significant free cash flow, maintaining a premier balance sheet, returning capital to shareholders, and demonstrating ESG leadership.
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Civitas Resources, Inc.
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Civitas Contacts
Investor Relations:
Brad Whitmarsh, 832.736.8909, bwhitmarsh@civiresources.com
Mae Herrington, 832.913.5444, mherrington@civiresources.com
Media:
Rich Coolidge, info@civiresources.com
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Civitas Resources, Inc.
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