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): February 15, 2019
PARSLEY ENERGY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36463 | 46-4314192 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
303 Colorado Street
Suite 3000
Austin, Texas 78701
(Address of Principal Executive Offices)
(Zip Code)
(737) 704-2302
(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)) |
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.
As previously disclosed, effective January 1, 2019, Bryan Sheffield, stepped down from his position as Chief Executive Officer of Parsley Energy, Inc. (the “ Company ”) and was appointed as the Company’s Executive Chairman of the Board of Directors (the “ Board ”) of the Company. Pursuant to the succession plan previously approved by the Board, Matthew Gallagher, who had previously served as President and Chief Operating Officer of the Company, succeeded Mr. Sheffield as the Company’s Chief Executive Officer and was appointed as the Company’s President and Chief Executive Officer. Following his service as Executive Chairman, it is anticipated that Mr. Sheffield will retire as an employee and officer of the Company and continue serving as Chairman of the Board, a non-employee director position.
In connection with Mr. Gallagher’s appointment as President and Chief Executive Officer of the Company, the Compensation Committee of the Board (the “ Committee ”) determined that an adjustment in his base salary from $550,000 to $750,000 was appropriate in order to reflect the increased responsibilities associated with his new position. On February 15, 2019, Parsley Energy Operations, LLC (the “ Employer ”), a wholly owned subsidiary of the Company, entered into an amendment (the “ Amendment ”) to the Amended and Restated Employment, Confidentiality and Non-Competition Agreement between the Employer and Mr. Gallagher (the “ Gallagher Employment Agreement ”) in order to reflect this adjustment to his base salary.
Similarly, in connection with Mr. Sheffield’s appointment as Executive Chairman, the Committee determined that an adjustment in his base salary from $850,000 to $550,000 was appropriate to reflect the responsibilities associated with his new position. The Board and Mr. Sheffield also agreed to extend the period of time that Mr. Sheffield is expected to serve as Executive Chairman from one to two years, which period may be further modified by the Board in its discretion. To memorialize these terms, the Company and Mr. Sheffield entered into a letter agreement on February 15, 2019 (the “ 2019 Letter Agreement ”), which describes the current terms of Mr. Sheffield’s compensation for his service as Executive Chairman. The 2019 Letter Agreement supersedes and cancels the original letter agreement concerning the same subject that was entered into between the Company and Mr. Sheffield on January 9, 2018 (the “ 2018 Letter Agreement ”). Other than the adjustment to Mr. Sheffield’s base salary and the extension of the period that Mr. Sheffield is expected to serve as Executive Chairman, the terms of the 2019 Letter Agreement are materially consistent with the terms of the 2018 Letter Agreement.
Following his retirement as an employee and officer of the Company, Mr. Sheffield will be compensated as a non-employee director so long as he continues to serve as Chairman of the Board.
The foregoing descriptions of the Amendment and the 2019 Letter Agreement are summaries, do not purport to be complete, and are qualified in their entirety by reference to the complete text of the Amendment and 2019 Letter Agreement, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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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.
| PARSLEY ENERGY, INC. | ||||||
| By: | /s/ Colin W. Roberts | |||||
| Colin W. Roberts | ||||||
| Executive Vice President—General Counsel | ||||||
| Dated: February 15, 2019 | ||||||
Exhibit 10.1
PARSLEY ENERGY OPERATIONS, LLC
FIRST AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT,
CONFIDENTIALITY, AND NON-COMPETITION AGREEMENT
WHEREAS, Parsley Energy Operations, LLC (“ Parsley ”) and Matthew Gallagher , a natural person (“ Employee ”) (Employee and Parsley each referred to as a “ Party ” and, collectively, as the “ Parties ” herein) entered into an Amended and Restated Employment, Confidentiality, and Non-Competition Agreement, effective as of January 1, 2019 (the “ Agreement ”); and
WHEREAS, the Parties desire to amend the Agreement as described below, effective as of January 1, 2019.
NOW, THEREFORE, the Agreement shall be amended as follows:
| 1. |
Section 1.02 of the Agreement shall be deleted and the following shall be substituted therefor: |
1.02 Base Salary. During the Term, Parsley will pay Employee a base salary of at least $750,000 per year, in periodic installments in accordance with Parsley’s customary payroll practices as may exist from time to time, but no less frequently than monthly. During the Term, Parsley may not decrease Employee’s salary below the base salary enumerated in this Section 1.02, but may, in Parsley’s sole discretion, increase Employee’s salary as it sees fit from time to time. Employee’s annual base salary, as in effect from time to time, is hereinafter referred to as Employee’s “ Base Salary .”
| 2. |
As amended hereby, the Parties ratify and reaffirm the Agreement. |
[Signatures Follow]
| First Amendment to Employment, Confidentiality, and Non-Competition Agreement | Page 1 |
Executed as of this 15th day of February, 2019.
| EMPLOYEE: |
| /s/ Matthew Gallagher |
| Matthew Gallagher |
| PARSLEY ENERGY OPERATIONS, LLC | ||
| By: | /s/ Colin W. Roberts | |
| Colin W. Roberts, EVP & General Counsel | ||
| First Amendment to Employment, Confidentiality, and Non-Competition Agreement | Signature Page |
Exhibit 10.2
P ARSLEY E NERGY , I NC .
February 15, 2019
Bryan Sheffield
303 Colorado Street, Suite 3000
Austin, Texas 78701
Dear Bryan:
This letter (this “Agreement”) sets out the understanding between you and Parsley Energy, Inc. (the “Company”) with respect to your service to the Company in the role of Executive Chairman of the Board of Directors of the Company (the “Board”) and your subsequent retirement as an officer and employee of the Company. This Agreement amends and restates the prior letter agreement between you and the Company, entered into as of January 9, 2018 (the “Prior Letter Agreement”), and, by entering into this Agreement, you acknowledge and agree that this Agreement cancels and supersedes the Prior Letter Agreement in its entirety, effective as of the date first set forth above (the “Effective Date”).
On January 1, 2019 (the “Transition Date”), you transitioned from your role as Chief Executive Officer of the Company to your current position as Executive Chairman. It is currently contemplated by you and the Company that you will serve in the position of Executive Chairman until December 31, 2020 or until such other time as the Board may determine, at which time you will retire as an officer and employee of the Company but continue to serve as Chairman of the Board, a non-employee director position. In connection with your service as Executive Chairman, the Compensation Committee of the Board (the “Committee”) has approved the following compensation arrangements for you, effective as of the Transition Date (subject to the Company’s payroll practices maintained for all officers of the Company):
| • |
your employment agreement, as amended (the “Employment Agreement”), will remain in effect until such time as you are no longer an employee or officer of the Company; |
| • |
during the period you are serving as Executive Chairman, your annualized base salary will initially be $550,000, which amount may be increased or decreased from time to time in the sole discretion of the Committee; |
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your benefits and the limited perquisites to which you are entitled will remain at the same level as in effect immediately prior to the Transition Date, and you will be eligible to receive an annual cash bonus for the fiscal years in which you continue to serve as Executive Chairman; however, you will not be granted new equity-based awards while you are serving as Executive Chairman; and |
| • |
upon your retirement as an officer and employee of the Company, your compensation shall transition to that of a nonemployee director, as determined by the Board and the Committee. |
You will be an employee and officer of the Company for all purposes throughout the period that you serve as Executive Chairman, including, without limitation, for purposes of any equity-based awards or other long-term incentive plan awards granted to you prior to your appointment as Executive Chairman. By signing below you agree to the above compensation arrangements and acknowledge that the terms of this Agreement, including the annualized base salary set forth above and any subsequent decreases thereto, as well as your transition from serving as Chief Executive Officer to Executive Chairman on the Transition Date and your subsequent transition from Executive Chairman to Chairman of the Board, in and of themselves, do not give rise to a right on your part to terminate your employment with the Company and its subsidiaries for “Good Reason” (as such term is defined in your Employment Agreement).
You further acknowledge that nothing in this letter shall be construed in any way to limit the right of the Company to terminate your employment, with or without cause, or for you to terminate your employment with the Company, with or without reason, nor shall this letter limit your right to resign from the Board at any time or limit the rights of the stockholders of the Company.
If you agree that the foregoing properly sets forth our understanding, please sign both copies of this letter and return one executed copy to me, keeping the other for your records.
Executed as of the date first set forth above.
| PARSLEY ENERGY, INC. |
|
/s/ Colin W. Roberts |
| Colin W. Roberts |
| Executive Vice President—General Counsel |
| AGREED AND ACCEPTED: |
|
/s/ Bryan Sheffield |
| Bryan Sheffield |
| Chairman of the Board and Executive Chairman |
| Parsley Energy, Inc. |
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