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): January 28, 2019

 

 

SANDRIDGE ENERGY, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

DELAWARE   1-33784   20-8084793
(State or other
jurisdiction incorporation) 		  (Commission File Number)   (I.R.S. Employer
Identification Number)

123 Robert S. Kerr Avenue

Oklahoma City, Oklahoma

(Address of principal executive offices)

(405) 429-5500

(Registrant’s Telephone No.)

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))

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.

On January 28, 2019, Sandridge Energy, Inc. (the “Company”) issued a press release announcing that it has appointed Paul D. McKinney as President and Chief Executive Officer of the Company, effective January 29, 2019 (the “Start Date”). A copy of the press release is included as Exhibit 99.1 to this Form 8-K. In connection with the appointment of Mr. McKinney, William M. Griffin, Jr., Interim President and Chief Executive Officer of the Company will resign from this position effective as of the Start Date.

Mr. McKinney, age 60, has served in various positions with Yuma Energy, Inc., a Delaware corporation (“Yuma Energy”), from June 2014 to January 2019, most recently as its President and Chief Operating Officer. Prior to Yuma Energy, Mr. McKinney worked in different roles of responsibility for Apache Corporation from 2007 through 2013, where he was last responsible for the development and all operational aspects of the Gulf Coast region for Apache as Region Vice President, Gulf Coast Onshore. From 2006 through 2007, Mr. McKinney was Vice President and Director, Acquisitions & Divestitures for Tristone Capital, Inc. Mr. McKinney commenced his career with Anadarko Petroleum Corporation and held various positions with Anadarko over a 23-year period from 1983 to 2006, including his last position as Vice President of Reservoir Engineering, Anadarko Canada Corporation. Mr. McKinney currently serves on the Board of Directors for Pro-Ject Holdings, LLC, a private oil field chemical services company. Mr. McKinney has a Bachelor of Science degree in Petroleum Engineering from Louisiana Tech University. He has over 30 years of experience in the oil and gas industry.

Mr. McKinney has no family relationships with any current director, director nominee, or executive officer of the Company, and there are no transactions or proposed transactions, to which the Company is a party, or intended to be a party, in which Mr. McKinney has, or will have, a material interest subject to disclosure under Item 404(a) of Regulation S-K. Mr. McKinney was not appointed as the Company’s President and Chief Executive Officer pursuant to any arrangement or understanding with any other person.

The Company and Mr. McKinney have entered into an offer letter (the “Offer Letter”), pursuant to which Mr. McKinney will receive an annual base salary of $500,000. He is eligible to participate in the Company’s Annual Incentive Plan, and his target cash bonus amount will equal 100% of his annual base salary. The Offer Letter also provides that Mr. McKinney will receive an award of 250,000 stock options under the Company’s 2016 Omnibus Incentive Plan (as amended and restated as of August 8, 2018) on the first business day following his Start Date and on each of the first and second anniversaries thereof, provided he continues to be employed by the Company. Mr. McKinney will also be entitled to participate in the retirement, welfare, incentive, fringe and perquisite programs generally made available to executive officers of the Company and will receive reimbursement of certain relocation and commuting expenses through October 31, 2019.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the complete copy of the Offer Letter, which is filed herewith as Exhibit 10.1.

Item 9.01

Financial Statements and Exhibits

10.1    Offer Letter.
99.1    SandRidge Energy, Inc. Press Release, dated January 28, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

    SANDRIDGE ENERGY, INC.
Dated: January 28, 2019     By:   /s/ Philip T. Warman
      Philip T. Warman
      Executive Vice President, General Counsel and Corporate Secretary

Exhibit 10.1

 

LOGO

January 28, 2019

Paul D. McKinney

22 Hepplewhite Way

The Woodlands, TX 77382

Dear Paul:

On behalf of the Board of Directors of Sandridge Energy, Inc. (the “ Board ”), I am pleased to extend a formal offer of employment to you (“ Executive ”) for the position of President and Chief Executive Officer of Sandridge Energy, Inc. (“ Corporation ”) with an employment start date of January 29, 2019 (the “ Start Date ”). This letter describes the key terms and conditions of your employment.

1.     Position . You will serve as President and Chief Executive Officer of the Corporation, reporting directly to the Board.

2.     Base Salary . Your annual base salary will be $500,000, less applicable taxes, payable in accordance with the Corporation’s normal payroll practices as in effect from time to time. Your base salary level will be reviewed periodically by the Board after receiving a recommendation from the Compensation Committee of the Board (the “ Committee ”). Any modifications to your annual base salary will be in the sole discretion of the Board.

3.     Annual Bonus . You will participate in the Corporation’s Annual Incentive Plan (“ AIP ”) (or any successor bonus plan) and your target bonus amount will be 100% of your annual base salary. Your annual bonus target will be reviewed periodically by the Board and Committee, with any modifications at the sole discretion of the board. Your annual bonus will be subject to the terms and conditions contained in the AIP.

4.     Long-Term Incentive Awards .

(a)    Effective as of the first business day following your Start Date, you will receive an award of 250,000 stock options under the 2016 Omnibus Incentive Plan (As Amended and Restated as of August 8, 2018) (the “ Equity Plan ”). These options, which will be subject to the terms and conditions of the Equity Plan and the terms and conditions of the Corporation’s option award documents, will (i) have an exercise price equal to the fair market value of a share of the Corporation’s common stock on their date of grant, (ii) vest on the first anniversary of the date of grant, and (iii) be settled in shares of the Corporation’s common stock upon exercise; and

 

 

123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 • Phone 405.429.5500, Fax 405.429.5977 • www.SandRidgeEnergy.com

Mr. Paul D. McKinney

Page Two

January 28, 2019

 

(b)    On each of the first and second anniversary of your Start Date, provided you are actively employed by the Corporation, you will receive an award of an additional 250,000 stock options under the Equity Plan. These options, which will be subject to the terms and conditions of the Equity Plan and the terms and conditions of the Corporation’s option award documents, will (i) have an exercise price equal to the fair market value of a share of the Corporation’s common stock on the date of grant, (ii) vest on the first anniversary of the date of grant, and (iii) be settled in shares of the Corporation’s common stock upon exercise.

5.     Benefit Programs . During your employment, you will be eligible to participate in the retirement, welfare, incentive, fringe and perquisite programs generally made available to executive officers of the Corporation, including the Corporation’s Paid Time Off Policy and Special Severance Plan, in accordance with the terms and conditions of the applicable plan or policy. The Corporation reserves the right to change the benefit programs at any time.

6.     Housing; Relocation . As a condition to your employment with the Corporation, you are required to relocate to Oklahoma City, Oklahoma. Your relocation shall occur on or before October 31, 2019. The Corporation will reimburse you for reasonable relocation expenses, subject to the approval of the Committee. During the period following your Start Date through October 31, 2019, you will be reimbursed for the reasonable cost of commuting from The Woodlands, Texas to Oklahoma City, Oklahoma. In addition, during the initial ninety (90) day period following your Start Date, you will be reimbursed for the reasonable cost of housing in the Oklahoma City metropolitan area. The expense of such commuting and housing is subject to the approval of the Committee.

7.     Restrictive Covenants . As a condition to your employment with the Corporation, you will be required to sign a restrictive covenant agreement in a form satisfactory to the Corporation, which shall include confidentiality and non-disclosure obligations, non-competition, and employee and customer non-solicitation restrictions (“ Restrictive Covenant Agreement ”).

Your execution of this letter will constitute a representation by you that you are not currently a party to any agreement that would inhibit your ability to accept and perform the duties of the position being offered.

Mr. Paul D. McKinney

Page Three

January 28, 2019

 

Subject to the satisfactory completion of a background check, your execution of the Restrictive Covenant Agreement, and to the terms and conditions of this letter, we are excited to formally extend you this offer to join our management team and strongly believe you will be a great leader of our organization.

The Company may, during the period prior to your written acceptance of this offer, elect to modify the terms of this letter or withdraw its offer of employment pursuant to this offer letter.

Sandridge Energy Inc.

By:   /s/ Jonathan Frates
  Jonathan Frates
Its:   Chairman of the Board

Agreed to and accepted by:

/s/ Paul D. McKinney
Paul D. McKinney
January 28, 2019
Date

Exhibit 99.1

 

LOGO

SandRidge Energy Announces New President and CEO

OKLAHOMA CITY, OKLAHOMA, January 28, 2019 – SandRidge Energy (NYSE: SD) (“SandRidge” or the “Company”) announced today that the Board of Directors (the “Board”) has appointed Paul D. McKinney as President and Chief Executive Officer, effective January 29, 2019. Mr. McKinney succeeds the Company’s current President and Chief Executive Officer, Mr. William M. Griffin, who will continue to serve on the SandRidge Board.

“On behalf of the board, we are excited to have Paul join the team,” said Mr. Griffin. “After an extensive search, we are confident we have found a candidate with the leadership skill and experience necessary to maximize value for our shareholders.”

Mr. McKinney has thirty-five years of industry experience, most recently having served as President and Chief Operating Officer of Yuma Energy, Inc. Prior to joining Yuma in 2014, he held a variety of leadership positions with Apache Corporation over a six year period, including Vice President of their Gulf Coast Onshore Region. Additionally, he was employed by Tristone Capital in 2007 as Vice President and Director of Acquisitions and Divestitures. Mr. McKinney commenced his career in 1983 with Anadarko Petroleum Corporation, advancing through a variety of engineering and operations positions, ending his time there as Vice-President of Reservoir Engineering for Anadarko Canada Corporation. Mr. McKinney has a Bachelor of Science degree in Petroleum Engineering and is published as a co-author with the Society of Petroleum Engineers and privately on subjects focused on advanced reservoir engineering methods.

“I am very excited to be joining SandRidge and honored to work with the SandRidge team as we develop our plans for the future,” Mr. McKinney commented. “The Company’s asset base and existing investment opportunities are impressive and have set SandRidge up for organic growth. I look forward to developing these exciting assets as well as pursuing the many opportunities that exist in the market today.”

Cautionary Statement Concerning Forward Looking Statements

This communication contains “forward-looking statements” “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. Such statements are often identified by use of the words “expects,” “believes,” “will,” “would,” “could,” “forecasts,” “projections,” “estimates,” “targets,” “opportunities,” “potential,” and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that SandRidge expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of

 

123 Robert S. Kerr Avenue, Oklahoma City, OK 73102 • Phone 405.429.5500, Fax 405.429.5977 • www.SandRidgeEnergy.com

assumptions, risks and uncertainties, including, but not limited to: the volatility of oil, gas and natural gas liquids (“NGL”) prices; uncertainties inherent in estimating oil, gas and NGL reserves and resource potential; the uncertainties, costs and risks involved in exploration and development activities; regulatory restrictions, compliance costs and other risks relating to governmental regulation; risk related to third party control over non-operated properties; midstream capacity constraints and potential interruptions in production, and other factors, many of which are beyond our control. SandRidge cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in SandRidge’s public filings with the SEC, which are available at the SEC’s website, http://www.sec.gov. Each forward-looking statement speaks only as of the date of the particular statement, and SandRidge undertakes no obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.

About SandRidge Energy, Inc.

SandRidge Energy, Inc. (NYSE: SD) is an oil and natural gas exploration and production company headquartered in Oklahoma City, Oklahoma with its principal focus on developing high-return, growth oriented projects in Oklahoma and Colorado. The majority of the Company’s production is generated from the Mississippi Lime formation in Oklahoma and Kansas. Development activity is currently focused on the Meramec formation in the NW STACK Play in Oklahoma and multiple oil rich Niobrara benches in the Colorado North Park Basin.

Investor Contact:

Johna Robinson

Investor Relations

SandRidge Energy, Inc.

123 Robert S. Kerr Avenue Oklahoma City, OK 73102

+1 (405) 429-5515